The Capital Waters documentation is a standardized set of documents designed for seed or series A investments in the Netherlands, ranging broadly speaking from € 100k to € 1mio. Documents for Angel investments below this range will be added shortly.
We have observed the following principles when designing the investment documents:
Simplicity
There exist extreme lengthy investment documents that cover each and every situation that a company could encounter and grant the investor all rights that one can think of. Most of these rights and provisions are never used. We have only included the most common provisions to keep it readable for both professionals and entrepreneurs and avoid spending time and money on reviewing and negotiating provisions that will never be used.
Neutrality
The documentation is not intended to favour either the startup or the investor. Of course every transaction is different and in some cases a different approach or other form of financing might be a better fit than the Capital Waters documentation. However, based on discussions we have held with various entrepreneurs and investors, we think that our documents represent widely a consensus on what should be in the transaction documents for an investment in a Dutch startup ranging broadly speaking from € 100k to € 1mio.
Open source
We encourage everyone to send us comments and suggestions for improvement. We will periodically revise the documents to reflect those comments and discuss them in more detail on our blog. Also please note that although the law firm of Benvalor is one the initiators of this project, we consider this an open source project. All lawyers of all firms are invited to use the documents and send us any comments or improvements they might have. The only thing you are not allowed to is publishing the documents on your website as your own or exploiting the documents commercially.
When using the documents you will find out that the Term Sheet is much shorter than you are used to. This is because in the Term Sheet the terms and conditions of the Subscription and shareholders agreement are incorporated by reference. This enables you to do most of the negotiations only in the Term Sheet phase in stead of having two rounds of negotiations during the Term Sheet phase and the contract phase afterwards. This should speed up negotiation and limit legal costs.
Last but not least, we are happy to provide you the documents but the use thereof is at your own risk, so please read the disclaimer.