OLNS#11 – Bridging the Pond – U.S. Venture Capital Deals from a German Market Perspective

Orrick Legal Ninja Series
3 hour read | August.08.2023

German version 

Venture financings and deal terms in the U.S. and in Germany have many similarities but there are also some differences. To help navigate these challenges, we have put together OLNS#11.

OLNS #11: Bridging the PondDrawing on our experiences with literally thousands of VC financings on both sides of the pond, OLNS#11 offers founders and investors with a "German market" background an introduction to U.S. VC deals and helps them understand where U.S. deals differ from a typical German financing.

In the U.S. ecosystem, the National Venture Capital Association ("NVCA") and, in particular, its model legal documents have great influence. Unlike in Germany, where standardization efforts are still in the early stages and the few attempts made so far to bring some order to the German documentation wilderness haven't really caught the market (yet), in the United States, the NVCA documentation is the undisputed benchmark.

Here is what can be found in this eleventh edition of OLNS:

  • Introduction to the NVCA and its template documentation;
  • Where to find what – structure and flow of U.S. and German deal documents;
  • Detailed comparison of where the NVCA and German market deal terms differ with deep dives into some particularly important economic and control terms;
  • Summary of downturn market term sheets and potential compromises;
  • Current U.S. deal term trends (2022 and 2023);
  • Implementation of down rounds in the U.S.; and
  • CFIUS considerations for non-U.S. investors.

OLNS#11 also augments and builds on our successful publication OLNS#7 that explains how German founder teams can get into a U.S./German holding structure (the famous flip).

In preparing OLNS#11, our international and cross-functional Orrick team again drew on experience representing more than 3,700 venture-backed companies and 100+ unicorns as well as the most active funds, corporate venture investors and public tech companies worldwide. Founded in the Bay Area, Orrick is one of the world’s leading technology law firms and advises on more venture transactions in Europe than any other law firm for 29 consecutive quarters (PitchBook, Q1 2023).

You can find an overview of our German Technology Transactions practice, including recent transactions and further publications, here.