May 26, 2023 by CVCA Staff

May 26, 2023 (Toronto, Ontario) - The Canadian Venture Capital and Private Equity Association (CVCA) has added a new term sheet (Term Sheet) to its Fund Formation Documents, providing a brief summary of the annotated limited partnership agreement (LPA) which was made available by the CVCA on its website in December 2022. The CVCA LPA and the Term Sheet outline certain material terms and conditions typically negotiated between LPs and GPs in a private equity and venture capital fund based in Canada.

"The CVCA LPA and Term Sheet provide a guiding framework for Canadian sponsors and investors as they begin negotiations," says Mia Bacic, partner at Bennett Jones practicing in the private equity and fund formation group at Bennett Jones LLP and lead lawyer in the CVCA's preparation of the documents. "While the documents do not attempt to address all the terms or the variations of the terms that could be used in a limited partnership agreement for a fund, we believe these CVCA documents are a valuable educational tool and were created to facilitate productive discussions between LPs and GPs in the Canadian private equity and venture capital landscape."

The CVCA LPA and Term Sheet were developed by a group of approximately 20 Canadian external legal counsels that represent both the GP and LP community in the fund formation process in Canada, as well as representatives of certain Canadian sponsors. The CVCA documents generally reflect applicable Canadian law, including tax law and limited partnership law in Ontario and Québec. They are annotated to assist readers with specific material terms as they are used in the LPA. While the CVCA LPA and the Term Sheet were drafted using a "model" limited partnership agreement and the term sheet produced by the Institutional Limited Partners Association (ILPA) (whole-of-fund waterfall), the CVCA documents were modified for use in Canada and are not CVCA “model” documents.

The LPA was added to the CVCA's Fund Formation Documents in December 2022 and updated in February. The CVCA documents are available for download here. For more information on these documents, please contact or Mia Bacic at [email protected].

The CVCA gratefully acknowledges the ILPA for granting permission to use the ILPA term sheet and the limited partnership agreement in Canada.

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