Public consultation on the Lean Documents Project to be launched shortly

The idea of creating a pan-European standard for early-stage investment documents dates back to the second IBA European Start-Up Conference held in London in November 2017.

In 2018, a think tank involving some 80 European lawyers discussed whether pan-European standards for lean documents were achievable. The results of the think tank were presented at the 2018 IBA European Start-Up Conference in Berlin. Seven topics were identified as being particularly amenable to standardisation. During the think tank, a number of national working groups gave their input on how these topics are commonly addressed in their jurisdictions.

Following the 2019 IBA European Start-up Conference in London, a working group of 35 experienced lawyers from different European jurisdictions identified, discussed and produced initial preliminary drafts of the following seven clauses intended to be used as a Pan-European standard in early-stage equity investments:

1. Warranties (including their limitations and remedies).
2. Board composition and reserved matters.
3. Lock-up provisions and pre-emptive rights,
4. Exit.
5. Tag-along/drag-along.
6. Liquidation preference.
7. Anti-dilution protection.

The results were presented at the IBA ‘From start-up to IPO’ conference that was held in Paris in October 2021.

In 2022, the project became an official project of the IBA under the name ‘Model Pan-European Lean Investment Agreement Clauses’, but the working group participants affectionately refer to it as the ‘Lean Documents Project’.

The Lean Documents Project has the following objectives:

1. to create a widely accepted pan-European standard for some of the most important clauses in early-stage equity investments in start-ups;
2. to create a large community of lawyers from all European jurisdictions who actively contribute to the project (and thus give the clauses the required acceptance); and
3. to encourage those European jurisdictions where (national) model standards do not as yet exist to put such standards in place.

For these reasons, the ‘Lean Documents working group’ has put together a White Paper, which explains the work done so far, presents the clauses as they have been drafted by the group and explains the rationale behind the drafting.

To complete the process, the White Paper will be now submitted to public scrutiny, to involve as many experienced lawyers as possible from all European jurisdictions and to collect their feedback.

As proud supporters of the Lean Documents Project, the IBA European Regional Forum and IBA Closely Held Companies Committee encourage all their members and all interested lawyers to participate in the consultation.

An email with all the instructions on participating in the public consultation will soon be sent by the IBA to all ERF and CHCC members. Your feedback will be highly appreciated!