Protective Provisions are consent rights (veto rights) granted to preferred stockholders that require a separate class or series vote before the company can take certain actions (e.g., amend the charter, issue senior securities, sell the company, or change the board size). In VC governance, Protective Provisions provide Negative Control and downside protection, and Protective Provisions are among the most negotiated terms in a preferred financing.
Ryan RobertsStartup Lawyer
Ryan Roberts is a startup lawyer with more than two decades of experience advising on venture financings and M&A transactions totaling more than $1 billion. He is the author of the Amazon bestselling startup law book Acceleration.
