Ecvc Draft Markup Series B Spa

Skill: Draft Markup of Series B Preferred Stock Purchase Agreement

1. Subject-matter triage

• Treat the investor draft as the baseline only for markup mechanics, not for legal acceptability.
• Start by mapping the source set: draft SPA, term sheet or strategy memo, cap table and capitalization exhibits, charter and Series A excerpts, and any transmittal email that changes the working assumptions.
• Separate true open points from implied imports: provisions copied from prior rounds, side-letter concepts, exhibit-only mechanics, and points only mentioned in email.
• If the source set contains only one investor package, state that explicitly before drafting; otherwise enumerate each relevant counterparty, class, or scenario before analyzing them.

2. Failure modes the skill is correcting

• The markup fixes the body language of the agreement but misses exhibit language that quietly changes economics or control.
• Consent rights are left in a broad class vote format even though a specific holder gets separate blocking power.
• Share issuance mechanics are accepted without reconciling them to the charter, existing preferred designations, and reserved shares.
• Signing reps are left untouched even where diligence materials make them inaccurate or overstated.
• The draft is rewritten as commentary only, without an actual redline file that can be circulated.
• Changes are described narratively but not marked in a way that survives conversion to .docx.

3. Legal frameworks / domain conventions that apply

• Economic preference analysis: test whether the preferred security changes the company’s payoff profile at exit by comparing preference and conversion outcomes at representative enterprise outcomes drawn from the deal materials.
• Charter and issuance authority: confirm the contemplated issuance fits within the authorized capital and any class-designation mechanics in the charter and related board or stockholder approvals.
• Control allocation: distinguish general class protections from bespoke investor vetoes, observer rights, or side-letter governance rights that alter the negotiated balance.
• Disclosure consistency: signing representations must be checked against the diligence record, including schedules, exceptions, and any email-carried understandings.
• Anti-dilution and price-protection review: inspect every schedule, exhibit, and defined term for conversion-ratio mechanics or equivalent protections that may not be obvious from the body text.
• Company-side drafting norm: where a provision is overbroad, narrow the operative trigger, add materiality, knowledge, or reasonableness qualifiers, and align the text with the term sheet and market convention.

4. Analytical scaffolds

• Read the draft against the term sheet point by point; extract every deviation, omission, and added protection.
• Review each schedule and exhibit separately for hidden economic or governance mechanics; do not assume the main text is complete.
• For each investor protection, ask whether it duplicates a general class vote or creates separate blocking power; if the latter, propose rationalization.
• Reconcile the share numbers across the draft, charter excerpts, cap table, and any closing mechanics before commenting on issuance sufficiency.
• Check each signing representation against the diligence record; flag any statement that would be inaccurate at signing or misleading by omission.
• For each material issue, give a concrete counterproposal rather than a general objection.
• Where the issue turns on economics, include a concise comparison of the relevant outcomes at a few representative exit levels drawn from the source materials, not invented transaction assumptions.
• Where multiple preferred series, holders, or time periods are in play, analyze each separately rather than collapsing them into one generic pass.
• Every legal point should be tied to the applicable authority or deal-document hook used in the source set, including the charter, SPA, term sheet, or governing legal standard relied on in the draft.

5. Vertical / structural / temporal relationships

• Track hierarchy carefully: charter and certificate language control over inconsistent SPA drafting, and the SPA controls only where it validly implements the charter and approvals.
• Track document interaction across time: prior-round rights, current-round modifications, and closing conditions may all affect the same provision.
• Track structural dependencies: if one clause depends on a schedule, exhibit, or defined term, the redline should change both the operative clause and the dependent cross-reference.
• Track temporal claims: signing, closing, funding, and post-closing covenants should not be mixed unless the source documents expressly do so.

6. Output structure conventions

• Produce the actual markup file as the primary deliverable; do not stop at a memo or issue list.
• Use plain-text change markers that remain readable after export, including explicit deleted, inserted, or replaced text conventions, and attach a short rationale to each substantive change.
• Organize commentary by issue severity using a defined ordinal scale stated once at the top, then apply it consistently.
• For each issue entry, use this sequence: severity, counterparty position, deviation from the source set or market convention, consequence for the company, and recommended counterproposal.
• Each issue should identify the relevant document interaction, the governing clause or authority hook, and the practical downstream effect on economics, control, disclosure, or closing deliverability.
• Include an economic preference comparison table when the preferred economics or conversion mechanics matter to the markup.
• Close with a concise Recommended Actions block naming the responsible role and the next timing milestone or urgency anchor.
• Before finishing, confirm that the primary markup file exists and is non-empty, and that it contains operative redlines rather than a descriptive summary.