What information rights entitle investors to receive, standard thresholds, common founder mistakes, and how to keep reporting overhead reasonable.
Information rights are the standard investor entitlement to periodic financials and metrics. Boilerplate in every priced round — but the specifics affect how much time your finance function spends on reporting.
Annual audited or reviewed financials within 90–120 days of year-end. Quarterly unaudited financials within 45 days of quarter-end. Annual budget within 30 days of year-start. Cap table on request.
Information rights typically apply only to 'major investors' — usually those investing above $500K–$1M. This prevents 20 small angels from each demanding quarterly reports.
Major investors typically get the right to inspect books and records with reasonable notice. Rarely exercised, but standard. Don't fight it — refusing looks like you have something to hide.
Information provided is subject to a confidentiality obligation. In practice, weak — investors share information with their firm and LPs freely. Assume anything you share with an investor is not secret.
Accepting monthly financial reporting as a requirement. Monthly is a heavy lift and not needed unless the round is in trouble. Push back to quarterly financials plus monthly narrative updates.
Monthly investor update (narrative + key metrics). Quarterly unaudited financials. Annual budget and audited financials. This satisfies information rights while keeping finance overhead reasonable.
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