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12 years ago @ Mendelson's Musings - Why There Will Never b... · 2 replies · +1 points

For the record, I've offered to get in a room with Brad and other attorneys/investors, but I really think that it needs to be an investor-driven process for any set of standard docs to gain widespread acceptable. For example, WSGR will generally not use the NVCA docs on a company-side Series A financing unless absolutely demanded by the investor. (It seems like this is generally true of other firms on the West Coast in my experience.) The WSGR-template Series A documents can be generated using document automation software, which makes it easy for us to draft -- and most of the firms that do a lot of venture financings are very familiar with the WSGR forms.

12 years ago @ OC VC - Open Letter to Congress · 0 replies · +1 points

Very well said.

12 years ago @ Feld Thoughts - The Challenge of The I... · 2 replies · +1 points

I'm late on commenting, but as the author of the TheFunded Founder Institute term sheet, I'd volunteer as the WSGR rep to be locked in a room with folks from other firms. I'm not sure if creating "NVCA"-lite documents is the answer. It may require a completely different approach to these concepts -- such as creating the Creative Commons-style human readable version of a term sheet with standard legalese that corresponds to the human readable version. Just talking out loud ...

13 years ago @ Mendelson's Musings - Quick Ways To Get Fire... · 1 reply · +1 points

This needs to be required reading for corporate attorneys.

13 years ago @ StartupCFO - Automatic Term Sheet G... · 0 replies · +1 points

Glad you like the tool.

13 years ago @ Feld Thoughts - Tennis Mini-break · 0 replies · +1 points

The Jack Kramer Autograph was my first racquet too ... until I had to have the Jack Kramer Pro Staffs (which pretty much seemed like the same racquet anyway) because John McEnroe used them.

13 years ago @ Mendelson's Musings - Time to Reboot Venture... · 0 replies · +1 points

As a practical matter, I'm not sure that eliminating/modifying some of the suggested rights will significantly decrease the length/complexity of the documents that much to make a difference. Perhaps there needs to be some sort of common understanding so that standard term sheet language refers to a commonly understood standard -- like "Creative Commons Attribution 3.0" refers to a longer license agreement with a human readable summary.

Getting rid of some of the registration rights might get rid of a couple of pages. Deleting price-based anti-dilultion might save a couple of pages, but the rest of the structural anti-dilution needs to remain. Getting rid of some reps and warranties would save a few pages -- but I don't think that reps are particularly difficult to read, as compared to, say, IRA indemnification provisions. Eliminating the RFR/Co-sale would eliminate an agreement, but most people never have substantive comments on a typical form anyway. Redemption rights aren't in most deals anyway, so I think there really isn't a savings there.

In any event, making venture financings easier to complete is a worthy goal.

13 years ago @ Dave Naffziger's ... - Making an IRS Section ... · 1 reply · +1 points

Hmm ... not sure where the advice is coming from ... I hope it's not any of my colleagues. I think that the suggestion to always place restrictions on founders stock at initial issuance to be an extreme and unnecessary position. I have never heard that advice before and I would be surprised to hear it from a reputable law firm. Even prior to the ruling, the conventional wisdom was that 83(b) filings were not necessary in the event of vesting of previously fully-vested stock in connection with a venture financing. I'll make a point to quiz some of my tax and employee benefits colleagues to double check as I believe the conservative position that you explain above is simply incorrect. At the end of the day, the corporate attorneys (like me) really defer to the tax and employee benefits specialists on any difficult 83(b) issues and I didn't think that there was even debate on this issue.

13 years ago @ Dave Naffziger's ... - Making an IRS Section ... · 1 reply · +1 points

Dave - in the situation where founders stock is originally issued with no vesting and then vesting is imposed by VCs in connection with a venture financing, no 83(b) filings are necessary in this case. The rev ruling is very clear on the subject, so I think that attorneys that have alternative views simply don't realize that this ruling exists. In the past, many attorneys counseled founders to make an 83(b) filing just in case in this situation, but this is no longer necessary. Thus, I think your comments above are somewhat misleading that "[c]reating stock vesting agreements after the 30-day 83B window is tricky."

13 years ago @ Ask the VC - Why Is My Venture Capi... · 0 replies · +1 points

Venture funds with in-house general counsels are particularly likely to have requested these amendments to indemnification agreements as they are aware of the issue. Most company counsels have no particular objections to amendments along the lines of the NVCA language, but the amendment requires board approval (and related explanation at a board meeting).