Over the past two decades, the globalization of the start-up and venture capital (VC) ecosystems beyond Silicon Valley has led to new technology and finance hubs emerging across the globe. As these ecosystems developed, VC investment terms have at times leveraged on, or diverged from, key terms in the US, and certain jurisdictions have adopted their own standardized investment agreements.
In this report, we compare eight key VC investment terms from the latest US National Venture Capital Association model agreements, the UK’s British Private Equity & Venture Capital Association model documents, and Singapore’s Venture Capital Investment Model Agreements, and against their respective local market positions. In addition, this report also compares how these eight terms are differently positioned in other key markets, including Mainland China, Hong Kong, Japan, India, Israel, Germany and Latin America.
Key themes from the report include:
The US market continues to be characterized by more founder-favorable terms compared to other jurisdictions due to strong competition over tech and talent.
The Latin American ecosystem is highly leveraged on the NVCA, but has demonstrated enhanced focus on protective provisions in the course of regional adaption.
Investors in the Israeli market are also more amenable to accept company/founder-friendly terms in pursuing tech and talent.
Asia generally provides more investor-friendly terms, particularly in the Mainland China market. There is a somewhat less rigid definition of “market” terms in India allowing more flexibility in negotiating terms.
The European markets, including the UK and Germany, on the other hand, have taken a more balanced approach.
