Investors’ Rights Agreement
(Series A Preferred Stock)

Summary

This template is an Investors’ Rights Agreement with respect to Series A Preferred Stock. It sets forth some of the contractual rights and obligations among the investors, the issuer, and sometimes the founders in connection with the purchase of preferred stock by investors. This template includes practical guidance, drafting notes, and alternate clauses. The issues most commonly addressed in an Investors’ Rights Agreement include: the ability for investors to obtain liquidity for their investment (registration rights), the ability for investors to participate in future equity offerings by the issuer (preemptive/participation rights), corporate governance matters (including voting arrangements with respect to electing directors) , and the issuer’s obligation to provide continuing disclosure to investors (information, inspection, and observation rights). Each section of the agreement should be carefully reviewed, and appropriately tailored, in light of the circumstances of each particular transaction. As many of the provisions are negotiable, and what is acceptable varies from situation to situation and whether the company or the investor is being represented, it is important that counsel review the drafting notes. This template should be read in conjunction with Preferred Stock Purchase Agreements, Related Agreements, and Supporting Documents: Drafting Considerations and Venture Financing Overview. This template also references a Series A Preferred Stock Purchase Agreement pursuant to which the terms of the preferred stock offering is being made. For additional resources related to start-up seed financing, see Start-Up Seed Financing Resource Kit. For more on private placements generally, see Private Placements Resource Kit.