What Are Reserved Matters in a Term Sheet? | Startup Legal Basics Explained скачать в хорошем качестве

What Are Reserved Matters in a Term Sheet? | Startup Legal Basics Explained

Understanding a term sheet can feel overwhelming — especially when you come across legal jargon like “Reserved Matters.” In this video, Preksha from Campus Fund breaks down what reserved matters really mean, why they exist, and how they impact founders and investors during the startup investment process. Reserved matters are decisions that a company cannot take without prior investor consent. They are the practical implementation of affirmative and veto rights, ensuring that major strategic actions are taken collaboratively. In this video, we cover: What reserved matters are and why investors need them Common examples of reserved matters in term sheets, including: Issuance of new shares and capital structure changes Major debt and third-party charges Amendments to Articles and key agreements Mergers, acquisitions, and business sales Changes in business model or line of activity ESOP pool modifications Appointment or removal of key managerial personnel Founder employment terms Auditor appointments Related party transactions How reserved matters balance investor protection with founder autonomy Best practices for founders when negotiating reserved matters Reserved matters are not meant to restrict founders — they exist to protect investor capital, provide clarity, and ensure accountability for decisions that can materially affect the business. This video is part of our series where we demystify the legal and financial jargon used in term sheets and startup investment documents. 💬 Have questions? Drop them in the comments — we’d love to help. 👍 If you found this useful, subscribe to our channel. 🎥 In our next video, we’ll be breaking down Liquidation Preference — don’t miss it!