Information Rights

The terms sheet sets out the Information Rights for the investors. The Information Rights section defines what information and reports are required and the reporting schedule, and sometimes which investors are entitled to receive the information. The standard set of financial reports that investors require include profit and loss (P& L) statements, balance sheets, and cash flow statements. For early stage companies these are typically unaudited financials. For a startup that is up and running, founders should recast the business plan as an operating plan that clearly outlines the key milestones the team intends to achieve. Typical milestones for a growing startup include sales goals, new product introductions, new customer segment plans, and team expansion. In most cases, reports are provided quarterly. It's a benefit to founders to limit the number of investors who will receive reports and financials. Many startups have sensitive or proprietary information, so it makes sense to keep the distribution list small. Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding. Let's go startup something today!