Sample Legal Templates for Fundraising

MaRS Discovery District has developed a set of templates of funding documents for use by Ontario entrepreneurs under Canadian law out of the need for standard legal documents for start-ups. While these documents may simplify the process of seeking funding, MaRS strongly encourages start-ups to seek legal counsel.

Context for developing sample legal templates for fundraising

Angels and micro-venture capital firms play an increasingly important role in the funding landscape for many early-stage technology entrepreneurs, particularly those in the web and mobile-application sectors. One side effect of a number of new investors participating in funding these capital-efficient organizations has been a proliferation of new variations of the standard legal documents presented to startups.

The startup community in the US responded to this same trend by rallying around a series of “standard”, “open-source”, “vanilla-preferred” investment documents. Ted Wang of Fenwick & West, a Silicon Valley law firm, was an early advocate of the new model in VentureBeat. He eventually created the “Series Seed” documents that are used by many leading angel investors, including Ron Conway and Mike Maples. Several others also made their documents publicly available, including TechStars, Y Combinator, and The Founder Institute.

All of these organizations had the goal of simplifying the fundraising process for investors and for start-ups: NONE sought to replace the need for strong legal advice being given to the respective parties. Likewise, we at MaRS continue to encourage entrepreneurs and investors to seek legal counsel.

Nevertheless, given these developments in the US, MaRS recognizes the need to create sample investment documents for Ontario-based entrepreneurs.

MaRS’ sample funding templates for entrepreneurs and investors

We reviewed the US agreements noted above, and also a large sample of financing transaction documents prepared by Ontario legal counsel, as well as document samples from the National Angel Capital Organization.

From those sources, we developed a set of standard templates for use under Canadian law; they largely reflect the “vanilla-preferred” terms being employed by early-stage incubators and investors in the US. Our goals with these documents were similar to those of our US counterparts. We wanted them to be:

  • Fair—favouring neither the investors nor the founders
  • Simple and short—so that entrepreneurs and seed investors could understand them with a minimum of time and effort
  • Ready-to-use—so they could be filled in and reviewed by involved parties and their counsel, allowing any redrafting to focus on the terms unique and specific to the deal

We have six of documents available for download:

  1. Term sheet (defines the overall terms of the deal)
  2. Subscription agreement (details the specific terms of the sale of shares to the new investors and the representations that each party is making to the other)
  3. Articles of Amendment (this adds to the corporation’s capital structure the new preferred shares that the investors are buying)
  4. Shareholders agreement (this defines the rules for voting, transferring and selling the new and existing shares of the corporation)
  5. Intellectual Property Assignment agreement (this provides assurance to investors that the founders have legally transferred to the company the intellectual property required to operate the business)
  6. Founders’ agreement (details the relationship between each of the founders and the company with respect to equity shares issued, how those shares vest and what happens to those shares should a founder leave voluntarily or be terminated, or in the event of their disability or death)

We hope these sample funding templates will help streamline business for Ontario investors, entrepreneurs and their respective legal advisors. With that in mind, please do note the disclaimer below. While MaRS is happy to make these documents available for educational purposes and to facilitate the negotiation of terms between investors and start-ups, the documents are yours to use at your own risk.


This sample set of legal documents has been made available by MaRS Discovery District for informational purposes only and does not constitute advertising, a solicitation, or legal advice. Neither the transmission of these sample legal documents nor the transmission of any information contained in this website is intended to create, and receipt hereof or thereof does not constitute formation of, a lawyer-client relationship. Internet subscribers and online readers should not rely upon these sample legal documents or the information contained in this website for any purpose without seeking legal advice from a qualified lawyer practicing in the reader’s province.

The information contained in this website is provided only as general information and may or may not reflect the most current legal developments; accordingly, information on this website is not promised or guaranteed to be correct or complete. MaRS Discovery District expressly disclaims all liability in respect to actions taken or not taken based on any or all the contents of this website.