Seasons are Changing and so are Venture Capital Investment Documents

Posted on January 12, 2018 by Jim Pickle

Last year, the National Venture Capital Association (the “NVCA”) undertook a review of its industry-wide venture capital investment documents, and the NVCA recently released an updated set of those investment documents. There are several significant changes to the NVCA investment documents that could affect VC financings, so our team will be summarizing those revisions for you. Below is our first list of important changes and our comments associated with those revisions. If you have any questions about the NVCA’s changes, do not hesitate to contact me (; 205-254-1846) or any other member of our Maynard Innovate team.


Stock Purchase Agreement
Sections 2.31-2.33
Summary: Added three (3) representations and warranties that address clinical trial testing and U.S. Food and Drug Administration regulation compliance and approval. Although these representations and warranties are life-science focused, investors could, and likely will, adapt such provisions to address other regulated sectors as well.

Certificate of Incorporation
Section 3.3.5
Summary: Added a provision that prohibits a company’s subsidiaries from issuing cryptocurrency or blockchain based assets. Given the uptick in cryptocurrency and blockchain based companies, this provision could be heavily negotiated in the future.

Investors’ Rights Agreement
Section 5.11
Summary: Added a covenant requiring a company to adopt a Code of Conduct and Anti-Harassment and Discrimination Policy.

Right of First Refusal and Co-Sale Agreement
Section 6.4; Alternative 2
Summary: Added an arbitration provision under the Delaware Rapid Arbitration Act (the “DRAA”) (10 Del. C § 5801), which is an alternative to the currently standard American Arbitration Association (the “AAA”) provision. The DRAA is supposed to produce more expedient and cost-effective arbitrations than arbitrations arising under the AAA rules.

Voting Agreement
Section 3.3(e)(ii)
Summary: Added a provision prohibiting investors from asserting claims that challenge the sale of a company or allege the breach of a fiduciary duty in connection with the sale of a company.

Code of Conduct and Anti-Harassment and Discrimination Policy
Summary: The NVCA created a form Code of Conduct and form Anti-Harassment and Discrimination Policy, likely to help companies satisfy the new Code of Conduct and Anti-Harassment and Discrimination Policy covenant in the Investors’ Rights Agreement.

If you would like to review the NVCA investment documents, visit