NACO Common Docs

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In Q1 of 2017, NACO created a task force of members and stakeholders, including leading law firm partners, to develop nationally applicable and accepted best practices for structuring Angel stage deals.

The goal of the project was to develop standards that guide investors to structure deals that:

  • Align the interests of the investor and investee;
  • Position the company for future investment and growth;
  • Protect the rights of the investor;
  • Reduce the friction inherent in negotiating deal terms;
  • Advisor Agreements;
  • Automated Template tools.

The following organizations partnered with NACO and provided the necessary resources to make this initiative possible.

National Best Practice Partners:

  • BDC Venture Capital
  • RBC
  • Canadian Government

Founding Legal Partners:

  • MLT Aikins
  • Gowling WLG
  • Caravel Law
  • Fasken Martineau
  • BCF Business Law
  • McInnies Cooper
  • Bennett Jones

The nationally inclusive consultations culminated in the development of four (4) standardized Term Sheets. These resulting templates act as a reliable guideline for both investors and investees and cover 80% of the content (terms) required to negotiate investments in 80% of early-stage investment scenarios. The notes accompanying the templates explain the reasons for the recommended approach and terms, and detail some common scenarios that would require a more customized approach. Supporting documentation was also created to help answer frequently asked questions. The Explainers section has important content developed while creating the Common Docs and useful for further understanding and questions.

The templates attempt to identify what is common in the Canadian market when engaging in early-stage investment and are to be adjusted to suit each interaction accordingly. NACO strongly recommends engaging with one of its partner law firms when using the templates as they would be most familiar with the intended reasons for how the document was structured and intended use cases for it.

Founding Legal Partners:

Andrew Dilts (MLT Aikins LLP) Vancouver, British Columbia
adilts@MLTAikins.com, +1 604-608-4584

Greg Shannon (Gowling WLG) Calgary, Alberta
greg.shannon@gowlingwlg.com, +1 403-298-1899

Stephen Monk (Caravel Law) Toronto, Ontario
smonk@caravellaw.com, +1 416-348-0313 x 121

Coby Schneider, (Bennett Jones LLP) Calgary, Alberta
schneiderc@bennettjones.com, +1 403-298-8138

Bruce Hibbard (Bennett Jones LLP) Calgary, Alberta
hibbardb@bennettjones.com, +1 403-298-8141

James McClary (Bennett Jones LLP) Calgary, Alberta
McClaryJ@bennettjones.com, +1 403-298-3651

Christian Jacques (Fasken Martineau) Montreal, Quebec
chjacques@fasken.com, +1 514-397-5191

Emil Vanjaka (Fasken Martineau) Montreal, Quebec
evanjaka@fasken.com, +1514-397-5198

Kristian Zimmerman (BCF Business Law) (Montreal)
Kristian.Zimmerman@bcf.ca, +1 514-397-5582

Robert Cowan (McInnies Cooper) Halifax, Nova Scotia
robert.cowan@mcinnescooper.com, +1 902-444-8427

Disclaimer: These model documents and related materials are for informational purposes only and are not to be construed as legal advice for any particular facts or circumstances. Independent legal advice with respect to particular transactions, facts or circumstances may be advisable and is recommended.  These documents are provided “as is”, without any warranty, either express or implied, and without liability. These documents are intended to serve as a starting point only, and must be tailored to meet your specific requirements