What is contained in an Investor Rights Agreement (IRA)

An investor rights agreement typically contains the following information:

1. Parties: The names and addresses of the parties to the agreement, including the company and the investors.
2. Securities: The type of securities being sold, such as common or preferred stock, and the terms of the sale.
3. Board of Directors: The rights of the investors to appoint a representative to the board of directors of the company.
4. Information Rights: The right of the investors to receive certain information about the company, such as financial statements, on a regular basis.
5. Preemptive Rights: The right of the investors to purchase additional securities in future rounds of financing to maintain their percentage ownership in the company.
6. Registration Rights: The right of the investors to require the company to register their securities with the Securities and Exchange Commission (SEC) so that they can be freely traded.
7. Transfer Restrictions: The limitations on the transfer of securities by the investors, such as restrictions on selling to competitors of the company.
8. Termination: The circumstances under which the agreement will terminate, such as when all of the securities have been sold or when the company goes public.
9. Governing Law: The state law that governs the agreement.
10. Amendments: The procedures for making changes to the agreement.

An investor rights agreement is used to protect the rights of investors in a private company and ensure that they have access to information and a say in the operation of the company.