Investor Rights Agreement

An investor rights agreement details rights a VC typically expects with an investment. It often entails: (1) The right to elect one or more directors to the company's board of directors; (2) The right to receive various reports, financial statements, and information; (3) The right to have its stock registered for sale in a public offering at the company's cost; (4) The right to maintain its percentage share ownership in the company by participating in future stock issuances; (5) The right to participate in the sale of any shares made by the founders of the company (a so-called "co-sale" right which is embodied in a separate agreement).