Information Rights
An investor's right to receive regular financial reports and company updates.
Definition
Information rights entitle investors to receive regular financial and operational updates from the company, typically including quarterly and annual financial statements, budgets, and cap table updates. Major investors (usually those above a threshold like $1M invested) get these rights automatically through their investment documents. Information rights ensure investors can monitor their investment.
Why it matters
As an employee, you generally do not have formal information rights. Investors may know more about the company's financial health than you do. Pay attention to all-hands meetings and any financial updates shared with employees to stay informed about the company's trajectory.
Example
Series A investors with information rights receive quarterly P&L statements, balance sheets, cash flow reports, ARR dashboards, and a cap table update. They know the company's burn rate and runway before any all-hands presentation.