I joined Venture Law Group in the 90's when the Internet Bubble was rapidly inflating. Prior to joining VLG I was a litigator in New York, so I arrived in California knowing nothing about startups or venture financings or corporate law for that matter. But venture capital was flowing like water at the time and there were more financings than the experienced lawyers could handle, so I was thrown in head first. And the only thing that kept me afloat in those first handful of financings was VLG's set of proprietary form financing documents. I was able to go on VLG's system and pull up documents that looked the way VLG thought the financing documents should look. The trick to being a corporate lawyer was to then conform the documents you were working on to the model docs in VLG's system.
The VLG forms were a hugely valuable resource for me when I was trying to get my arms around the world of venture financing. They made it possible for me to get up to speed surprisingly quickly. And now there are just such a set of form documents available online for everyone, not just the folks working in corporate law. Over a year ago a group of lawyers from throughout the venture community got together to create what they collectively believed were the model financing documents. After innumerable hours of drafting and arguing, they came to agreement on the documents and have now made them available to the public. Rather than creating a single set of documents for all financings, the model documents read a bit like a Mad Lib. In virtually every instance, the drafter is given choices among typical financing clauses. As a result, the model documents encompass virtually any reasonable financing term a VC or entrepreneur might encounter.
I am grateful that these financing documents are no longer a part of my daily routine. But I'm equally grateful that I had to opportunity to learn the ins and outs of venture financings before becoming a VC. It has given me the ability to appreciate the true nature of the tradeoffs reflected in the financing terms themselves. For those VCs and entrepreneurs who have not had that luxury, I would urge you to read through the model documents. While they will likely produce as many questions as they do answers, they will give you a good sense of the issues at stake and a pretty comprehensive lay of the land.