Written by Jessica Galang

The organization has spent the past three months working with Canadian angel investors and founders on standard document templates, meant to act as a guideline, for early-stage startup investments. Open Angels’ Boris Mann and E-Fund’s Peter Dorsman acted as project leads working with Canada’s startup ecosystem.

“There’s all kinds of stories — and I’m sure each of you have your own stories — about the amount of friction and confusion that exists sometimes in deals and the way that they’re done,” NACO CEO Yuri Navarro said during the launch event. “And the sad side effects of that…just the way you structure a deal can actually have a significant, negative impact on a company in the future.”

Navarro said that the goal of Common Docs is to reduce the friction in negotiating deals by having the docs as a starting point, and give both founders and funders a better way to understand how deals are structured.

“This is really a matter of raising the literacy around this stuff from a Canadian perspective. There actually is no central Canadian repository of really anything,” said Mann. “The other thing that we sought to do was answer the question is, what is common? That was definitely something that was starting to come from the NACO membership, even some stories of saying ‘we lost a deal because we were told our terms weren’t market.’ What is common? What’s market?”

In a panel with founders and investors during the event, the speakers touched on some of the pain points that having a central resource could solve.

“Don’t trust your lawyer,” said Rubsun Ho, founder of Crowdmatrix and co-founder of Caravel Law. “What we see too often is founders putting their hands up and saying, my lawyer says this…so I can’t [do that]. That’s the beauty of Common Docs is answering this question of, what is market? It allows someone to say to their lawyer, the lawyer’s job is to allocate risk, and your job as a founder is to figure out if that risk is acceptable and not just accept the lawyer’s word that this is too much risk.”

When it comes to getting more people interested in angel investing, Zoom.ai founder Roy Pereira said it’s important to get more young founders involved. “I think we have to get some of the younger people who had a few exits, or one exit at least, to get more involved in angel groups and crowdfunding,” said Pereira. “I find they’re not interested or they don’t see themselves in these groups. So I think there may be a disconnect, And they’re not investing as much as they could because they don’t see themselves in the community.”

The NACO Common Docs portal will work to be a community resource for ongoing release of educational material, notes, and opinion pieces related to early stage financing in Canada.

“Seed stage angel investing is not for the faint of heart. You have to go in knowing that, in an allocated portion of your wealth and portfolio, you are probably going to lose 100 percent of that,” said Michelle McBane, investment director at MaRS IAD. “And so, you have to expect that. We have limited data at the angel and seed stage to make decisions on. We do our very best to do as much due diligence as we can.”

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StartUp HERE Toronto is a publishing partner of Betakit and this article was originally published on their site.