Business Law

Business Law News 2015, Issue 1

Introducing the Sample Venture Capital Opinion

Douglas F. Landrum

Doug Landrum is a shareholder with Jackson, DeMarco, Tidus & Peckenpaugh in Irvine, California. He practices in the Firm’s Corporate Department, specializing in LLC joint ventures and M&A transactions, and representing banks and borrowers in lending transactions. He serves on the Steering Committee of the Opinions Committee of the State Bar.

In the fall of 2010, the Opinions Committee of the Business Law Section of the State Bar of California (the "Opinions Committee") appointed a drafting committee that would ultimately consist of Richard N. Frasch, as reporter, and Twila L. Foster, Jerome A. Grossman, Timothy G. Hoxie, Ann Yvonne Walker, and me (the "Drafting Committee") to draft a Sample California Third-Party Legal Opinion for Venture Capital Financing Transactions (the "Venture Opinion").1 Although the Drafting Committee was charged with writing and editing the Venture Opinion, the work is the product of the full Opinions Committee in consultation with the Corporations Committee of the Business Law Section of the State Bar of California.

The Venture Opinion is addressed to the purchasers of preferred stock of a Delaware corporation. The documents for the stock purchase transaction select California law as the governing law. This transaction is typical (and, by choosing California law for the documents, the opinion could illustrate an enforceability opinion which, were Delaware law chosen, could not be rendered except on an "as if" basis).

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