Morrison Foerster Contributes to the VIMA 2.0 Suite of Model Legal Documents for the Southeast Asia Start-Up Ecosystem

Morrison Foerster is honored to be a member of the core working group which has developed the Venture Capital Investment Model Agreements (VIMA) 2.0 suite of standard form documents for early-stage venture capital transactions in Singapore. 

The VIMA initiative was first launched in 2018 by the Singapore Academy of Law and the Singapore Venture & Private Capital Association in consultation with lawyers, investors, and other professionals in the regional venture capital and start-up ecosystem to help boost the appeal of Singapore as a hub for start-ups and venture capital investments. The VIMA suite served as a useful resource for lawyers, founders, and investors preparing the necessary transaction documents for seed‑funding rounds. It enables parties to negotiate with a common understanding of the structure of the definitive agreements, thereby saving time and costs and allowing parties to focus on negotiating deal-specific legal and commercial terms. 

VIMA 2.0 is the latest iteration of the VIMA suite and is designed to provide model contracts that are specifically tailored to a start-up’s early days. The suite has been expanded and upgraded to reflect market trends and incorporate feedback from an extensive industry consultation:

• Series A Set: The Series A set has been refined and improved to reflect market developments and changes since 2018. For example, given the increased popularity of short-term bridging rounds, VIMA 2.0 introduces a new model convertible note purchase agreement, as this tends to be the instrument of choice for such bridging rounds. Similarly, a new model constitution corresponding to the VIMA shareholders and subscription documents has been introduced for easy adoption by users.

• Pre-Series A Set: A separate set of pre-Series A documents has been created to facilitate and support a start-up’s journey towards its first fundraising. The pre Series A set provides basic documents to address some of the key founder and company establishment issues, with the intention that, as the business grows, these documents may be superseded by the more complex and sophisticated arrangements in the VIMA Series A set.
• ESG Letter Agreements: Investors have been making, and will increasingly be making, commitments around ESG to their investors and stakeholders. There is currently no standard set of terms in the market for the documentation of ESG related obligations. VIMA 2.0 introduces a groundbreaking model ESG letter agreement to provide a reference for incorporating ESG-related provisions in a share or convertible note financing of a Singapore company. Short- and long-form versions of the model ESG letter agreement are available. Early stage companies may use the short-form letter agreement, while later stage growth or matured companies may use the long-form version.

The Morrison Foerster team led by Singapore partner Lip Kian Ang, San Francisco partners Suz Mac Cormac and Alfredo Silva, and Hong Kong partner Thomas Chou, with support from San Francisco associate Kate Tyler, made significant contributions to the model ESG letter agreements and the model convertible note agreement. 

Lip Kian Ang commented, “We are delighted to have served in the core working group for the VIMA 2.0 initiative. We are especially grateful for the robust and thoughtful exchange of ideas among the numerous like-minded and leading industry players that went into producing the groundbreaking ESG letter agreements, which we are confident will help to catalyze the adoption of ESG related provisions in M&A, private equity, and venture capital investment transactions and, more generally, aid purchasers, investors, and companies alike in their respective ESG journeys.”

More information on VIMA is available here.