Venture Capital Investment Model Agreements (VIMA)

Venture Capital Investment Model Agreements (VIMA) by SAL and SVCA provide a set of model agreements for use in seed rounds and early stage financing.

1. Startups and investors can use these to negotiate commercial terms.

2. These model agreements are optimally used as common reference for discussion. Parties should then go to lawyers to advise on legal terms and legal issues BEFORE agreeing to any term sheet.

3. After taking legal advice, execute term sheet and get lawyers to assist in amending the Model Agreements to reflect the terms.

4. This way, the process will be more cost- and time-efficient. Lawyers can value-add for the advice and bespoke drafting of specific terms in the Model Agreements, and not have to spend much time reviewing some other party’s precedent documents. All round, the legal and admin costs should decrease.

Stakeholders should appreciate lawyers’ value-add in this. Do not assume that this will do away with lawyers. I have seen many executed agreements where parties DIY and had no idea what they were writing or signing. There have been only very few agreements done impressively, usually because they have in-house lawyers.

#startups #venturecapital #privateequity #capitalraising #SingaporeLaw

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