Investor Rights Agreement

Investor Rights Agreement

Date: [__/__/____]
Company: [________________________________], a [________________________________] corporation (the "Company")
Investors: The investors identified on Schedule A hereto (collectively, the "Investors")

Recitals

WHEREAS, the Company and the Investors are entering into a Series [____] Preferred Stock Purchase Agreement dated [__/__/____] (the "Purchase Agreement"), pursuant to which the Investors are purchasing shares of the Company's Series [____] Preferred Stock;

WHEREAS, the Company and the Investors desire to set forth certain rights of the Investors with respect to registration of securities, access to information, and participation in future financings, as more particularly described herein;

WHEREAS, this Agreement is intended to reflect the market-standard provisions set forth in the NVCA Model Investor Rights Agreement (October 2025 update), as adapted for this transaction;

NOW, THEREFORE, in consideration of the mutual covenants herein and other good and valuable consideration, the parties agree as follows:

Article 1 – Definitions

"Common Stock" means the Company's Common Stock, $[____] par value per share.

"Damages" means any loss, damage, claim, cost, or expense (including reasonable attorneys' fees).

"Demand Registration" has the meaning set forth in Section 2.1.

"Exchange Act" means the Securities Exchange Act of 1934, as amended.

"Form S-3" means a registration statement on SEC Form S-3 (or any successor form) for shelf registration.

"Holder" means any Investor or permitted transferee holding Registrable Securities.

"Initiating Holders" means Holders who collectively hold at least [____]% of the then-outstanding Registrable Securities (or such lower threshold as may be elected by the Board).

"IPO" means the Company's first underwritten public offering of Common Stock registered under the Securities Act resulting in aggregate gross proceeds of at least $[________________________________] million.

"Major Investor" means any Investor that, together with its Affiliates, holds at least [________________________________] shares of Preferred Stock (as adjusted for stock splits, dividends, and recapitalizations). As of the date hereof, the Major Investors are: [________________________________].

"Piggyback Registration" has the meaning set forth in Section 2.2.

"Pro Rata Share" means a fraction, the numerator of which is the number of Preferred Shares held by a Major Investor (on an as-converted basis) and the denominator of which is the total number of shares held by all Major Investors (on an as-converted basis).

"Register," "Registered," and "Registration" mean a registration effected by preparing and filing a registration statement under the Securities Act.

"Registrable Securities" means: (a) the Common Stock issuable upon conversion of the Preferred Stock; (b) any Common Stock issued as a dividend or other distribution with respect to, or in exchange for or in replacement of, the Preferred Stock; and (c) any other Common Stock issued in respect of the foregoing; provided, however, that securities shall cease to be Registrable Securities when (i) they have been sold pursuant to an effective registration statement, (ii) they are eligible for resale under Rule 144 without volume limitation, or (iii) they are held by a Holder that holds less than 1% of the Company's outstanding Common Stock (on an as-converted basis) and all such Registrable Securities held by such Holder can be sold in a single 90-day period under Rule 144.

"Rule 144" means Rule 144 promulgated under the Securities Act.

"Securities Act" means the Securities Act of 1933, as amended.

Article 2 – Registration Rights

2.1 Demand Registration

(a) Right to Demand. At any time after the earlier of (i) [180] days after the effective date of the Company's IPO or (ii) [5] years after the date of this Agreement, the Initiating Holders may request (a "Demand Registration") that the Company file a registration statement on Form S-1 (or any successor form) covering the registration of all or a portion of the Registrable Securities held by the Initiating Holders.

(b) Company Obligations. Upon receipt of a Demand Registration request, the Company shall, as soon as practicable and in any event within [90] days after receipt of such request, file a registration statement covering the requested Registrable Securities, and shall use commercially reasonable efforts to cause such registration statement to become effective.

(c) Demand Registration Limitations:

(d) Underwriter Cutback. If the managing underwriter advises that the number of securities exceeds what can be sold without materially and adversely affecting the offering price, then securities shall be excluded in the following priority: (i) first, securities held by the Company or selling stockholders other than Holders; (ii) second, Registrable Securities of Holders (pro rata among participating Holders).

2.2 Piggyback Registration

(a) Notice and Participation. If the Company proposes to register any of its securities under the Securities Act (other than a registration on Form S-4, Form S-8, or any successor form), the Company shall give written notice to all Holders at least [20] days before the anticipated filing date, and each Holder shall have the right to request inclusion of its Registrable Securities in such registration.

(b) Underwriter Cutback. If the managing underwriter advises that the number of shares to be included exceeds what can be sold without adversely affecting the offering, securities shall be reduced in the following priority:
(i) First: securities proposed to be sold by the Company are reduced proportionally;
(ii) Second: Registrable Securities of Holders are reduced pro rata; and
(iii) Third: securities of any other selling stockholders are excluded entirely.

(c) In no event shall the Registrable Securities of Holders be reduced to less than [25]% of the total shares included in such offering.

2.3 Form S-3 Shelf Registration

(a) Eligibility. After the Company becomes eligible to use Form S-3, Major Investors may request registration on Form S-3 of all or a portion of their Registrable Securities.

(b) Minimum Aggregate Offering. The anticipated aggregate public offering price of Registrable Securities to be registered pursuant to any Form S-3 request shall be at least $[5,000,000].

(c) Maximum S-3 Requests. The Company shall not be required to effect more than [2] Form S-3 registrations in any 12-month period.

(d) Company Obligation. Upon receipt of a valid S-3 request, the Company shall file the registration statement within [45] days and use commercially reasonable efforts to cause it to become effective.

2.4 Registration Procedures

In connection with any registration pursuant to this Article 2, the Company shall:

(a) Prepare and file with the SEC the registration statement and use commercially reasonable efforts to cause it to become effective;
(b) Prepare and file amendments and supplements to the registration statement;
(c) Furnish to each participating Holder such number of prospectuses as may be reasonably requested;
(d) Notify each participating Holder of any stop order or other suspension of the registration statement;
(e) Use commercially reasonable efforts to register or qualify the Registrable Securities under applicable state blue sky laws;
(f) Cause its transfer agent to remove restrictive legends upon effectiveness of the registration; and
(g) Cooperate with participating Holders to facilitate the timely preparation and delivery of stock certificates or book-entry transfers.

2.5 Registration Expenses

The Company shall bear all costs and expenses of each registration, including SEC registration fees, printing costs, accounting fees, and the Company's legal fees. Each Holder shall bear its own underwriting discounts and commissions applicable to its Registrable Securities.

2.6 Indemnification

(a) By Company. The Company shall indemnify each Holder against any Damages arising from (i) any untrue or alleged untrue statement of a material fact contained in the registration statement, prospectus, or any amendment, or (ii) any omission or alleged omission to state a material fact required to be stated therein, except to the extent such Damages result from information furnished by such Holder.

(b) By Holders. Each Holder shall indemnify the Company against Damages arising from any untrue statement or omission contained in information furnished by such Holder for inclusion in the registration statement.

2.7 Lock-Up

Each Holder agrees, if requested by the managing underwriter, not to sell, transfer, or otherwise dispose of any securities of the Company (other than those being registered) for a period of up to [180] days following the effective date of the Company's IPO, subject to the condition that all executive officers and directors of the Company are similarly bound.

Article 3 – Information Rights

3.1 Financial Statements

The Company shall deliver to each Major Investor:

3.2 Inspection Rights

Each Major Investor shall have the right, upon reasonable notice and at reasonable times, to (a) visit and inspect the Company's facilities; (b) inspect and copy the Company's books, records, and accounts; and (c) discuss the Company's business and affairs with senior officers and the Company's independent auditors.

3.3 Confidentiality

Each Investor receiving information pursuant to this Article 3 shall maintain such information in strict confidence and shall not use or disclose it except for the purpose of evaluating and managing the Investor's investment in the Company. This obligation shall not apply to information that is or becomes publicly available through no fault of the Investor, is independently developed by the Investor, or is required to be disclosed by law.

3.4 MNPI Acknowledgment

Each Major Investor acknowledges that it may receive material non-public information ("MNPI") about the Company. Each Major Investor agrees to comply with applicable securities laws, including restrictions on trading in the Company's securities while in possession of MNPI.

Article 4 – Pro Rata Rights (Preemptive Rights)

4.1 Right of First Offer

Subject to Section 4.2, the Company shall, before issuing any New Securities (as defined below), offer each Major Investor the right to purchase its Pro Rata Share of such New Securities at the same price and on the same terms as proposed to be offered to third parties.

"New Securities" means any equity securities of the Company (including Common Stock, Preferred Stock, options, warrants, convertible notes, and SAFEs), other than Exempted Securities.

4.2 Exempted Securities

The following issuances are exempt from the pro rata rights set forth in Section 4.1:

(a) Shares issued or reserved for issuance under the Company's equity incentive plans, as approved by the Board;
(b) Shares issued upon conversion or exchange of outstanding convertible securities;
(c) Shares issued as consideration in mergers, acquisitions, or strategic partnerships approved by the Board;
(d) Shares issued to banks, equipment lessors, or financial institutions in connection with commercial credit arrangements, equipment financing, or similar transactions, approved by the Board;
(e) Shares issued in connection with the Company's IPO; and
(f) Shares issued in connection with any stock split, stock dividend, or recapitalization.

4.3 Pro Rata Notice and Procedure

(a) The Company shall deliver written notice (the "Issuance Notice") to each Major Investor at least [15] business days before the proposed issuance date, describing the New Securities, quantity, price, and material terms.

(b) Each Major Investor may elect to purchase up to its Pro Rata Share of the New Securities by delivering written notice to the Company within [10] business days after receipt of the Issuance Notice.

(c) If any Major Investor does not elect to purchase its full Pro Rata Share, the Company may offer the remaining New Securities to other Major Investors (on an oversubscription basis) and then to third-party investors on terms no more favorable than those specified in the Issuance Notice.

Article 5 – Termination of Rights

The rights set forth in this Agreement shall terminate:

Article 6 – Transfer of Rights

6.1 Assignment

The rights granted to each Investor under this Agreement may be assigned to (a) any Affiliate of such Investor; (b) any fund managed by the same general partner or investment manager; or (c) any transferee acquiring at least [________________________________] shares of Registrable Securities (as adjusted for stock splits), provided that (i) the Company is given written notice prior to such assignment, (ii) the transferee agrees in writing to be bound by this Agreement, and (iii) such assignment is in compliance with applicable securities laws.

Article 7 – Miscellaneous

7.1 Governing Law; Venue

This Agreement shall be governed by the laws of the State of [________________________________]. Any dispute shall be resolved in the courts of [________________________________].

7.2 Notices

Notices shall be in writing and delivered by personal delivery, overnight courier, or email with confirmation to the addresses on Schedule A.

7.3 Amendments

This Agreement may be amended only by a written instrument signed by (a) the Company and (b) Investors holding a majority of the then-outstanding Registrable Securities; provided that any amendment that adversely affects any Investor disproportionately to other Investors requires such Investor's written consent.

7.4 Counterparts; Electronic Signatures

This Agreement may be executed in counterparts; electronic signatures are valid and binding.

7.5 Entire Agreement

This Agreement, together with the Purchase Agreement and related documents, constitutes the entire agreement of the parties regarding the subject matter hereof.

7.6 Severability

If any provision is held invalid or unenforceable, the remaining provisions shall continue in full force and effect.

Signatures

COMPANY:

[________________________________]

By: __________________________________
Name: [________________________________]
Title: [________________________________]
Date: [__/__/____]

INVESTORS:

Investor 1: [________________________________]

By: __________________________________
Name: [________________________________]
Title: [________________________________]
Date: [__/__/____]
Number of Shares: [________________________________]

Investor 2: [________________________________]

By: __________________________________
Name: [________________________________]
Title: [________________________________]
Date: [__/__/____]
Number of Shares: [________________________________]

Investor 3: [________________________________]

By: __________________________________
Name: [________________________________]
Title: [________________________________]
Date: [__/__/____]
Number of Shares: [________________________________]

Schedule A – Investors

Practitioner Notes:
- The October 2025 NVCA update increased the minimum S-1 demand registration offering size from $15 million to $20 million. This template reflects that update.
- The October 2025 NVCA update also introduced OFAC/sanctions carve-outs and refined definitions for "Requisite Holders" and "Competitor" with options to name specific non-competitor funds.
- Pro rata rights: The NVCA model uses the same "Major Investor" threshold for both information rights and pro rata rights. Confirm this threshold is appropriate for the deal (commonly $1M–$5M aggregate investment or a share count equivalent).
- CA variations: California Corporations Code § 25102(f) provides a blue sky exemption for equity issued in California-based offerings to qualified investors; ensure compliance.
- Lock-up: Typical IPO lock-up period is 90–180 days; underwriters may require 180 days for venture-backed companies.
- Sanctioned parties: Per the October 2025 NVCA update, the Agreement should exclude from "Requisite Holders" any investor that is a Sanctioned Party (as defined with reference to OFAC and applicable law).