Hey Alan, this a good post topic that doesn’t get enough ink from a Canadian perspective — for both founders & funders.
On this point about SAFE — do you have any personal opinions on the SAFE? Or issues with particular terms in it?
I’ve written extensively on Canadian Early Stage Term Sheets — like the fact that we don’t have any common terms at all in Canada, which means that there is a dearth of founder education on the topic. Whereas the US has multiple well documented term sheets.
(yes, I understand that multiple standard docs aren’t ideal, but the US ones are all pretty similar with the same intent embedded in them)
I don’t see anything wrong with the Canadian-ized SAFE, other than I’d like a canonical one that we can all talk about. Similarily, as 500 Startups 500CAN fund revs up, I assume they’ll be using a Canadian-ized version of their KISS documents.
So far, I don’t see enough Canadian angel investors offering their own term sheet (waiting for the startup to offer them one), or I keep seeing various hand-rolled term sheets with wacky, bespoke terms that just cause legal wrangling and fees for everyone involved.
What do you think? Should we have a broader discussion about both valuation and common terms in Canada?