In startup financing, standardized fundraising documents transform what was once a maze of bespoke legal negotiations into a streamlined process. These templates — pre-vetted agreements outlining key terms like valuation, equity, and investor rights — reduce legal fees, accelerate deal closings, and minimize disputes, allowing founders to focus on growth rather than paperwork. By using a common language and expectations, they foster trust between entrepreneurs and investors, reducing the asymmetry of information that often disadvantages early-stage companies.

Y Combinator’s (YC) Simple Agreement for Future Equity (SAFE), launched in 2013, has been the main example of this shift. Designed as a lightweight alternative to convertible notes, the SAFE defers valuation until a priced round, offering simplicity without interest accrual or maturity dates. Its impact has been seismic: quickly adopted as an industry standard, SAFEs have enabled thousands of startups to raise seed capital rapidly, democratizing access to funding for founders outside elite networks. YC’s open-source release enabled wide-ranging improvements to startup investment, with adaptations in Europe and beyond, curbing predatory terms that plagued earlier instruments.

Standardization levels the playing field, curbing investor overreach and promoting founder-friendly economics (like non-participating preferences) that prioritize long-term value creation. This not only attracts diverse talent but also sustains a healthier ecosystem, where innovation thrives on merit rather than negotiation savvy. However, up until now this shift had only really extended as far as the SAFE, and the early rounds (primarily pre-seed and seed) which happen on a convertible equity basis.

Founded in 2025 by Dalton Caldwell, Paul Buchheit, and Bryan Berg, Standard Capital draws on the partners’ roots in the startup ecosystem, and their connections to Y Combinator. Caldwell and Buchheit, former YC partners, bring rare expertise — Caldwell as a long-time YC Managing Director, and Buchheit as the creator of Gmail and an early OpenAI investor. Berg, with his background in infrastructure at Stripe, rounds out the team.

A hallmark of Standard Capital’s strategy is the public release of their Series A fundraising documents, bringing a similar level of transparency to priced rounds. By publishing these terms online for anyone to review, the firm empowers founders to understand the deal upfront, reducing surprises and streamlining negotiations. This openness builds trust, attracts high-caliber applicants who value efficiency, and minimizes time wasted on mismatched investors. Founders can focus on building rather than fundraising marathons, aligning with the firm’s ethos that “a fast ‘no’ is not the worst outcome.”

The documents themselves comprise five core components, blending standard VC structures with innovative tweaks:

Structure of the Investment

The investment is structured through a set of five core legal documents that work together to define the terms of the deal, the rights of the investors, and the governance of the company moving forward.

  • Term Sheet: This is a non-binding summary of the principal terms of the financing. It serves as the blueprint for the definitive legal agreements. The “No-Shop/Confidentiality” clause is the only binding part.
  • Stock Purchase Agreement (SPA): This agreement details the mechanics of the transaction itself. It specifies who is buying the stock, at what price, the conditions that must be met before the closing, and the representations and warranties both the company and the investors make to each other.
  • Amended and Restated Certificate of Incorporation (Charter): This is the company’s foundational document, filed with the State of Delaware. It defines the rights, preferences, and privileges of the Series A Preferred Stock relative to the Common Stock, covering key terms like liquidation preference, dividends, conversion rights, and protective provisions (veto rights).
  • Investors’ Rights Agreement (IRA): This agreement establishes the ongoing rights of the investors after the financing closes. It primarily covers registration rights (how investors can sell stock in an IPO), information rights (access to company financials), and pro-rata rights (the right to participate in future funding rounds).
  • Side Letter: This is a separate agreement exclusively for Standard Capital, the lead investor. It grants additional consultation and information rights, particularly if they do not have a representative on the company’s Board of Directors.

Summary of Key Terms and Implications

Here are the most critical terms for a company and its founders to understand.

Economic Terms
  • Valuation: The deal is priced based on a $[50,000,000] post-money valuation. This valuation includes a new employee option pool representing 10% of the company’s post-financing capitalization. This means the founders’ ownership will be diluted by both the new investment and the newly created option pool.
  • Liquidation Preference: In a sale or liquidation of the company (a “Deemed Liquidation Event”), the Series A holders get their money back first. They are entitled to receive the greater of (1) their original investment amount (1x preference) or (2) the amount they would receive if they converted their shares to Common Stock. This is a “non-participating” preferred stock structure, which is standard and founder-friendly. It prevents investors from “double-dipping” (getting their money back and then sharing in the remaining proceeds).
  • Dividends: Investors are entitled to a 6% non-cumulative dividend. “Non-cumulative” is key—it means dividends only get paid if and when the board declares them, and they don’t accrue year after year if unpaid. This is a much more favorable term for the company than cumulative dividends.
  • Anti-Dilution Protection: If the company later sells stock at a lower price (a “down round”), the conversion price of the Series A Preferred Stock is adjusted using a broad-based weighted average formula. This is the most common and founder-friendly form of anti-dilution protection, offering a moderate adjustment compared to the more punitive “full-ratchet” method.
Control and Governance
  • Protective Provisions (Veto Rights): As long as a certain number of Series A shares are outstanding, the company cannot take certain major actions without the approval of a majority of the Series A investors (the “Requisite Holders”). These actions include:
    • Selling or liquidating the company.
    • Changing the charter or bylaws in a way that harms the Series A investors.
    • Creating a new class of stock with rights senior to the Series A Preferred.
    • Issuing any cryptocurrency or digital tokens.
    • Incurring more than $1,000,000 in debt.
  • Voting Rights: On most matters, the Series A Preferred Stock votes together with the Common Stock on an as-converted basis.
  • Conversion:
    • Optional: Investors can convert their preferred shares into common stock at any time.
    • Mandatory: The shares automatically convert into common stock upon a Qualified Public Offering (QPO)—defined as a firm commitment underwritten IPO with at least $50,000,000 in gross proceeds—or with the consent of the majority of Series A holders.
Founder and Company Terms
  • Founder Re-Vesting: At least 75% of each founder’s total equity will be subject to a new vesting schedule over a minimum of three years following the closing. This is a significant investor-friendly term, as it “re-sets” the clock on founder vesting, ensuring they remain committed to the company.
  • Investor Rights:
    • Pro-Rata Rights: “Major Investors” (those who invest at least $1,000,000) have the right to purchase their pro-rata share in future financing rounds to maintain their ownership percentage.
    • Information Rights: Major Investors are entitled to receive annual and quarterly financial statements, budgets, and capitalization tables.
    • Employee Stock Plan: New employee options will vest over four years, with a one-year “cliff” for the first 25% and monthly vesting thereafter. This is a standard vesting schedule in the startup ecosystem.
How It Differs from Other “Standard” Contracts

While largely aligned with market standards (e.g., NVCA model documents), Standard Capital’s forms have a few notable differences:

  • Legal Fees (Company-Friendly): The term sheet explicitly states the company will not be responsible for any of Standard Capital’s legal fees or expenses. This is a major and highly favorable deviation for the company, as it’s standard practice for the company to pay the lead investor’s legal fees up to a negotiated cap (often $25,000-$50,000).
  • Founder Vesting (Investor-Friendly): The requirement for founders to subject 75% of their existing equity to a new three-year vesting schedule is a decidedly investor-friendly term. While not unheard of, it’s often a point of heavy negotiation, especially for founders who have been working on the company for a significant period.
  • Board Seat & Governance Structure: The documents suggest a flexible governance model. The Side Letter provides Standard Capital with significant information and consultation rights if they are not represented on the board. This indicates they may not always take a board seat, which differs from the traditional VC model where the lead investor almost always takes a board seat. The set also notably lacks a separate “Voting Agreement,” which is a standard NVCA document used to establish the composition of the Board of Directors.
  • Specific “No Token” Provision: The protective provisions include a specific veto right over the creation or distribution of “digital tokens, cryptocurrency or other blockchain-based assets”. This is a modern clause reflecting current market trends and risks that is not present in older “standard” document sets.

Overall, Standard Capital’s terms lean investor-friendly on governance but prioritize founder autonomy, differing from NVCA models by forgoing board control and emphasizing peer support. This could redefine Series A as more equitable, much like YC’s SAFE revolutionized seeds, ultimately empowering founders to retain control and scale ambitiously.