National Venture Capital Association’s (NVCA) introduced updates to its model legal documents last week.
The updates to the NVCA Model Legal Documents address the recent changes to foreign investment into the United States in conjunction with the Foreign Investment Risk Review Modernization Act (FIRRMA). FIRRMA expanded the scope of the Committee on Foreign Investment into the U.S. (CFIUS) to include non-controlling investments into U.S. companies if certain factors are met. The updates include changes to the model Term Sheet and an insert for a Limited Partnership Agreement.
“Venture investors and startups have contended with a shifting landscape as foreign investment scrutiny has intensified in recent months,” Bobby Franklin, president and CEO of NVCA, said. “These changes to the NVCA Model Legal Documents provide guidance to VCs and startups and also demonstrate to policymakers that our industry is dedicated to safeguarding American innovation. We will continue to work with CFIUS and legislators to ensure FIRRMA is implemented in a way that allows startups to thrive and create jobs in the United States.”
The updates are part of NVCA’s commitment to making available resources to support new company formation. The model legal documents are made available as a free public resource. The model legal documents aim to provide a comprehensive set of financing documents, promote consistency among transactions, and reduce transaction costs and time.