Clients often ask for a standard form of NDA or a standard set of representations or some other "normal" agreement. You know, "the usual thing…" A corollary to this request is the request that the lawyer turn (sometimes the word is "spin") the document instantly. The problem with this approach to legal documentation is that in the legal world, facts are critical and context is king – not that "standard" forms are not useful, but their utility depends upon the facts and circumstances of their use. So here is one example to make the point:

As a general proposition, VCs like to tightly control the authorized capital stock of the companies in which they invest. To oversimplify just to make the example easy to follow. Easy Company might have 1 million shares of Common Stock and 1 million shares of convertible preferred stock. In this situation, the authorized number of shares of common stock permitted under the charter might be 2 million (1 million of common stock held by the founder and 1 million shares of common stock into which the preferred can convert). (In reality the numbers are never this easy because the company will have an option pool and perhaps other commitments, but let’s ignore that for the moment.)

An entrepreneur might bargain for, and might obtain, some additional shares of common stock that could be issued in the future without amending the certificate of incorporation (which can be a hassle). So say the entrepreneur bargains for and obtains an additional 100,000 shares. The investor might or might not agree to additional shares, depending on the investor’s view of the world. For example, if the investor controls a majority of the board she may be comfortable knowing that board authorization is needed for any issuance or the investor might be persuaded of the practicality of having available shares. Having said that, investors do not always control the board. If the investor agrees thinking that the "standard" NVCA provisions protect him because they require a vote of the preferred separate from the common or the board to issue these shares, he may have an uncomfortable awakening.

My point really is that the devil is in the details and the facts and the form matter. There is no substitute for focusing on these things. Just going with the standard forms could lead to unintended consequences. And, as one of our people at the firm likes to say, "Murphy is always lurking in the dark cornes."