Open Source Seed Financing Documents
Across the globe, thousands of venture financing transactions are closed on an annual basis. The intention of these templates is to help streamline the development of specific investment documentation through use of a standardised and consistent set of seed financing agreements.
These open source seed financing documents can provide a well-informed starting point for parties involved in the provision or receipt of seed financing for a small, early stage business. The documents can also play a helpful role in providing entrepreneurs with guidance on how an early round of seed financing is often structured.
The documents contain a number of detailed drafting notes to explain important legal and commercial concepts to the user.
Note: Please feel free to use these documents, but please do so only after taking your own advice from a qualified legal adviser. The documents are designed for venture funding in the range of $250,000 to $2m. The documents could also serve as the foundation for some later-stage financings, but it is likely that the documents would need to be adapted by a qualified legal practitioner to ensure they are appropriate for the circumstances of a specific investment transaction.
To assist in the use of the seed financing documents, the Australian Investment Council encourages anyone who is unfamiliar and inexperienced with these types of legal agreements to read a detailed overview of the below documents:
IP assignment deed
These documents have been developed as a joint initiative of a number of leading firms in the early stage investment sector in Australia. The firms that have contributed to their development include: K&L Gates Lawyers, LegalVision, Greenwoods + Herbert Smith Freehills, Gilbert + Tobin Lawyers, as well as Blackbird Ventures and AirTree Ventures.
Valuation & Reporting Guidelines
The Australian Investment Council is a Founding Member of the International Private Equity and Venture Capital Valuation (IPEV) Board. The IPEV Board is comprised of senior and highly-experienced professionals within the private capital investment community from a range of jurisdictions around the world.
The IPEV Board’s primary objective is to develop and maintain a globally-consistent set of guidelines for a principles-based approach to the valuation of unlisted assets held by private capital investors. The guidelines are specific to our industry and are developed in close collaboration with international accounting standard setting bodies to ensure consistency with international frameworks for the preparation and presentation of financial information.
The current version of the IPEV Guidelines was released by the IPEV Board in December 2018.
The Australian Investment Council has for many years encouraged all member firms to adopt the principles set out in the IPEV Guidelines to assist in sharing transparent and consistent data with investors on a periodic basis.
Visit the International PE & VC Valuation Guidelines website for more information about the IPEV Board and the mechanisms used to develop and periodically maintain the international standards.
Information about Australia’s representation at the IPEV Board can be directed to firstname.lastname@example.org.
International Investor Reporting Guidelines
The Australian Investment Council encourages the use of a standardised reporting framework for the sharing of investment specific information between fund managers and their investors.
In 2016, the Institutional Limited Partners Association (ILPA) released a global leading practice reporting template for use by private capital investors all around the world. The ILPA Reporting Template has been rolled out in many developed markets globally, and the framework has been adopted and used by a range of fund managers and investors here in the Australian market. The reporting template covers specific data relating to fees, expenses and carried interest, and is a helpful tool in bringing about consistency and uniformity in reporting.
ILPA is continuing its work globally to enhance and improve the reporting framework, with further updates to the toolkit expected in the near future.
The ILPA reporting template can be accessed through ILPA’s website.
Non-Disclosure / Confidentiality Agreement Template
This template can be used as a guide to ensure information given to investors is provided on the basis that the investor will maintain and protect confidentiality between parties. It can be adapted to individual circumstances as appropriate.
Australian Investment Council non-disclosure/confidentiality agreement.