What are Information Rights?
Information rights entitle investors to receive financial statements, board materials, budgets, and other company information. They're standard in venture deals for investors above a certain threshold.
Typical Information Package
Monthly or quarterly financials, annual audited statements (if applicable), board meeting materials, budget and business plan, and any material developments.
Founder Considerations
Information rights create reporting obligations. Build processes to deliver consistent updates. Good investor communication builds trust even when news isn't great.
Formula
Standard information rights include:
- Monthly/quarterly unaudited financials
- Annual financial statements
- Annual budget within 30 days of fiscal year
- Board materials when distributed
- Notice of material events
Example
Series A term sheet grants information rights to investors holding 5%+ of preferred stock.
Required deliverables:
- Monthly P&L, balance sheet, cash flow within 30 days
- Quarterly board deck within 15 days
- Annual budget by January 31
- Cap table updates with any equity changes