NACO's Common Docs Project at Bennett Jones

Written by Coby A.B. Schneider, Stephen D. Burns, Bruce A. Hibbard and James T. McClary

Angel investments in Canada increased again in 2016, with angel groups frequently participating in larger syndicated deals and follow-on investments. The National Angel Capital Organization's (NACO) seventh annual Report on Canadian Angel Investing Activity found that angel groups made 418 investments, amounting to over $157.2 million. Of the deals reported, average deal size was $1.7 million.

To help keep angel investment growing, NACO launched the Common Docs project earlier this spring. This initiative creates standard term sheets for early stage startup investment in Canada. Now for the first time, founders and funders across the country have a starting point for building great companies together through a set of common financing documents.

The Bennett Jones Calgary office recently hosted a NACO Academy event on the Common Docs that included a panel discussion, networking and a passionate audience of innovators and investors. Bruce Hibbard, corporate and securities law partner at Bennett Jones was a panelist and spoke about the use of the Common Docs and the correct time to consult legal advice, use of simple agreements for future equity (SAFEs) in Canada, the amount of funding that startups should be looking for and other related topics. Other panelists included Patrick Lor, managing partner of 500 Startups Canada, Mark Mastracci, founder of Escapecode Ventures and Kristina Milke, president of VA Angels.

Yuri Navarro, CEO & executive director of NACO and Sandi Gilbert, NACO director and founder & CEO of SeedUps Canada, moderated the discussion and spoke about how the key goals of the Common Docs project is to develop standard documents that:

• align the interests of the founder and funder;
• positions the company for future investment and growth;
• protects the rights of the investor; and
• reduces the friction inherent in negotiating deal terms.

Bennett Jones is a strong supporter of NACO. Coby Schneider (counsel, Calgary) and Stephen Burns (partner and head of IP, Calgary) worked on the Common Docs project from its start. Bruce and James McClary (partner, Calgary) edited the project's standard term sheets. Members of this team went to meetings and discussions around the entire project and helped NACO take it across Canada. Bennett Jones also sponsored NACO's 2016 National Angel Summit in Vancouver and continues to support the NACO Academy. The Academy is an investor education program designed to develop higher levels of knowledge and skill among angel investors across the country, with specialized Canadian content.

NACO's mission is to grow and professionalize angel investment in Canada and evolve it into a mature asset class for interested investors that will drive Canadian economic development and innovation. Visit NACO's Common Docs portal here.