See how YC’s model term sheet would be reflected in actual agreements

Early in 2019, Y Combinator (YC) published a model Series A term sheet reflecting what YC considers to be “standard and clean” terms for a financing from Silicon Valley VCs. The term sheet is based on YC’s extensive experience investing in hundreds of early-stage startups.

In two years, Atrium attorneys have guided hundreds of clients through over a billion dollars raised in venture financings. To provide further guidance to founders, we put together a set of financing documents, based on the forms published by the National Venture Capital Association, to show how YC’s model term sheet would be reflected in actual agreements. These documents assume that the startup is set up as a Delaware corporation.

A set of preferred stock financing documents normally includes the following five agreements:

  • Amended and Restated Certificate of Incorporation (here)
  • Preferred Stock Purchase Agreement
  • Investors’ Rights Agreement (here)
  • Right of First Refusal and Co-Sale Agreement (here)
  • Voting Agreement (here)

The Preferred Stock Purchase Agreement (SPA) is a document that details how and when the sale and purchase of preferred stock will take place. This agreement covers the purchase price of the preferred stock, when and how closing will occur, the representations and warranties of the company and investors, and any conditions to closing.