An appointment sheet sets out the main conditions under which an investor (or group of investors) will buy shares in a company. It also outlines the ongoing rights and obligations of investors, founders and the company vis-à-vis such a company. With the exception of certain provisions, a terminology sheet is a non-binding agreement and the parties concerned must enter into binding agreements to implement their terms. Venture capital investments are becoming increasingly popular and widespread in Singapore and Southeast Asia, and this trend is expected to continue. Each investment may be unique, but founders and investors (and their respective advisors) don`t need to spend time and cost preparing and negotiating any investment from scratch, especially for start-up financing. In order to reduce transaction costs and reduce friction during the negotiation process, Investment Venture Capital Agreements (VIMA) offer a series of models for use in seed cycles and start-up financing. (a) VIMA documents are comprehensive in their coverage of the most important legal concepts, which are typically contained in final agreements on the early stages of financing operations. This allowed the parties to enter into negotiations with a common understanding of the overall structure of final agreements and to focus their efforts on negotiating specific legal and trade conditions; The Singapore Academy of Law and the Singapore Venture Capital – Private Equity Association launched the Venture Capital Model Agreements (VIMA) in October 2018. VIMA proposes a series of usage models in seed cycles and start-up financing, aimed at reducing transaction costs and reducing friction during the negotiation process. The VIMA document collection is available on www.singaporelawwatch.sg for free download and includes: This confidentiality agreement requires a company to provide a potential investor with confidential information about itself. It should be noted that it is not uncommon for VCs to refuse to enter into confidentiality agreements. Launched on October 23, 2018, VIMA is a series of contracts that balance the interests of investors and equity parties, limit the scope of outstanding issues on which the parties are negotiating and help the parties reach common ground more quickly.
The standard agreements, developed in a simple and user-friendly form, contain explanations designed to help users determine their position on the basis of their relative negotiating positions. The first set of documents, which covers the pre-series A and Series A funding cycles, includes: b) the net reduction required to prepare final agreements (to reduce net legal costs incurred by clients); and the objective of the standard agreements is to reduce the need for companies to spend time and money preparing and negotiating venture capital investments, particularly in the initial phase of financing. The documents were developed by a committee of leading lawyers, investors and financiers. Q. Does this model agreement mean that VCs and start-ups can now enter into financing agreements without taking over the services of a lawyer? “This initiative complements national efforts to promote the growth and vitality of Singapore`s venture capital ecosystem; and we also expect that VIMA will play a key role in the adoption of Singapore`s First Phase Financing Operations Act, as all model agreements provide by default that they are subject to Singapore law and that all related disputes are settled in Singapore. ” – The President, Judge Sundaresh Menon, at the presentation of VIMA in October 2018 Finally, on behalf of the Editorial Board and the SAL, I would like, on behalf of the Editorial Board and the ALS, to have all members of the legal community (both practitioners and in-house lawyers), tax advisors, accountants and VC companies – my sincere congratulations and thanks to those who have so generously exchanged their experiences and their skills.