The National Venture Capital Association (NVCA) is one of the most representative industry organizations for venture capital in the United States. Under the initiative of Ms. ReedSarah, the association organized a large number of industry experts (see the list of personnel listed on the association website for details) to draft a set of venture capital model contracts and generously opened them to the public. This set of texts * * * includes 8 files. They are $TermSheet, scries a preferred stock purchase agreement, certificate of incorporation, model agreement, investor rights agreement, operating rights draw, right of first refusal and joint sales agreement and Votm'g agreement, which basically covers a typical risk All agreement texts required for the investment operation process. The National Venture Capital Association has developed this set of contracts to: (1) reflect the "best practices" of current venture capital operations and guide the formation of industry standards; (2) treat venture capital institutions and the U.S. Venture Capital Model Contract fairly and companies or entrepreneurs; (3) Provide multiple options and reflect diverse financing conditions; (4) State necessary or helpful explanatory opinions; (5) Anticipate and eliminate legal traps; (6) Provide a complete set of internal logic Harmonious financing tools; (7) Promote consistency between transactions; (8) Reduce transaction costs and time (refer to the explanation on the association’s website). Looking at this set of agreements, it can be said that the association has achieved its predetermined goals very well, and what the association is trying to provide through this set of agreements is exactly what is urgently needed in China's venture capital practice. This book fully translates the entire set of contracts formulated by the National Venture Capital Association. Its publication can be said to have invited the American "Byrne" to the Chinese venture capital community.
However, users need to be reminded that the prescription prescribed by this American "Dr. Bethune" is not for China, but based on a company registered in Delaware, USA. The validity and enforceability of this Agreement will largely depend on the laws of the State of Delaware, and many of its provisions are set out from the special legal context of Delaware. For example, the Drag-AlongRight clause (translated as "forced sale right" in this book, also translated as "forced sale right" or "leading right" in China) refers to the right to force the company's original shareholders to participate in a public sale. If the company fails to be listed within the agreed period, investors have the right to force the original shareholders of the company (mainly founder shareholders and management shareholders). The maximum number of shares that the original shareholder must sell in this transaction is equal to: the total number of shares held by the original shareholder × (the number of shares the investor intends to sell, the total number of shares held by the investor). An important reason why carryover provisions are so widely adopted is that the Delaware Supreme Court ruled in Omnicare v. NCS Healthcare, hnc, that the deal protection provisions in mergers were invalid.. After that, in order to make the agreements they signed with shareholders Still valid and enforceable without board support, investors entered into a drag-on provision. Additionally, drag-right provisions can play a special role when the venture capitalist is a minority shareholder. In LNC Minnesota Law Case No. 7.
DMITRI WIRELESS HOLDINGS LIMITED. (Del. Maroon', 2006), courts have explicitly upheld the validity of drag-right clauses, which makes it popular in venture capital transactions.
Although the National Venture Capital Association’s Model Contract is based on Delaware law, the principal agreements and terms set forth in the Reflective Venture Capital Agreement convey to us how U.S. venture capital operates. Best practices and industry standards represent the highest international level and are of great benefit to educating domestic companies and entrepreneurs and improving the professional level of domestic lawyers.
Ms. Gu Huaning of the China International Economic and Trade Arbitration Commission undertook a large amount of translation work. Lawyers Yu Xugang and Qian Weiqing, senior partners of Dacheng Law Firm, lawyer Lu Liangbiao, partner and director of the Venture Capital Committee of the Beijing Lawyers Association, and lawyer Song Yunfeng, director of the Market RD Department, have been paying close attention to this work and have given full support and helpful guidance. Other colleagues from Dacheng Law Firm and the Venture Capital Committee of the Beijing Lawyers Association have also given different kinds of care and help, and I would like to express my gratitude.
The publication of this book is especially grateful to Ms. Reed Sarah, the initiator of "Contract Model" for her enthusiastic help. Sarah not only graciously agreed to translate and publish the entire contract, but also graciously served as a consultant, providing much valuable guidance and advice. Special thanks to Wang Zhongde, director of the management committee of Dacheng Law Firm, who has a strategic vision, for his strong support for this work; special thanks to the editors of Fangyuan, Gao Ruhua, Guo Liang and other legal publishing houses for their patient and meticulous work in publishing this book.