Standardization and Innovation in Venture Capital Contracting: Evidence from Startup Company Charters
Robert Bartlett
What the paper says
This study examines the standardization of venture capital contracts following the 2003 release of the National Venture Capital Association’s model charter. Among nearly 5,000 Series A startup charters, model adoption rose from 2 percent in 2004 to 84 percent by 2022, driven largely by six major law firms. Delaware incorporation also increased from 63 percent to 100 percent, reflecting the model’s assumption of a Delaware corporation. Despite growing contract standardization, capital structures have become more complex: In 2004, 83 percent of charters authorized only Series A preferred stock and one class of common stock, compared with 4 percent by 2022 due to the prior issuance of seed-stage securities and, to a lesser extent, dual-class common stock. Overall, firms’ Series A financings have standardized, but their capital structures have become more complex because of the growing role of seed-stage capital, making Series A startups more mature today than in 2003.
Evidence weight
Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40
| F · citation impact | 0.50 × 0.4 = 0.20 |
| M · momentum | 0.50 × 0.15 = 0.07 |
| V · venue signal | 0.50 × 0.05 = 0.03 |
| R · text relevance † | 0.50 × 0.4 = 0.20 |
† Text relevance is estimated at 0.50 on the detail page — for your query’s actual relevance score, open this paper from a search result.