Investors' Rights Agreement
What investors get beyond their shares.
An agreement, typically signed alongside a priced financing round, that gives investors rights beyond simple share ownership: information rights (financials and updates), pro rata rights to participate in future rounds, and sometimes registration rights. It's standard in venture financings and sets expectations for the ongoing investor relationship.
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- Surprise bills
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What an Investors' Rights Agreement should include
Information rights — the financial and operational reporting investors receive, and how often.
Pro rata rights — the right to maintain ownership percentage by participating in later rounds.
Board rights — a seat or an observer, and what that entitles them to see.
Inspection rights — access to books and records, and the limits on it.
Registration rights — the mechanics if the company ever goes public.
Termination — which rights fall away on a financing, a sale or a listing.
When you need one
At a priced financing, usually alongside the share terms. Canadian venture rounds are frequently built on the model documents published by the CVCA, which is a useful reference point when a term looks unusual.
How Ruby drafts it
Tell us what you need
Describe the agreement, your business context, and how fast you need it. A few smart questions, not a legal questionnaire. Your price and turnaround are confirmed before anything starts.
Ruby drafts it
Once pricing is confirmed a qualified Ruby lawyer is assigned to your file, and the first draft is built from your answers and real Canadian statute.
A licensed lawyer reviews every line
A lawyer licensed in Canada reviews and finalizes the document before it reaches you, and writes the plain-language summary that comes with it.
Signed, stored, and yours to revisit
You get the final agreement and its summary, stored so you can come back to it rather than hunting through email for the current version.
The fee is set before any of that starts. Hourly billing moves as scope does; a flat fee is one number, confirmed in writing, that doesn’t change after the work is done. See how Ruby prices agreements.
Or did you mean one of these?
These get confused with an Investors' Rights Agreement often enough to be worth ruling out before you buy the wrong document.
Questions people ask
No. The share terms — preferences, conversion, anti-dilution — sit in the constating documents. The investors' rights agreement covers what the investor gets as a relationship: reporting, participation, board access, inspection.
They let an investor keep their percentage by investing again in later rounds. For the investor that protects their position in a company that is working; for the company it means part of the next round is already promised.
An observer attends and sees materials without voting or owing directors' duties. It is the lighter option and is often enough for a smaller cheque. A seat changes the governance of the company and deserves more thought.
Looking for the plain definition rather than the document? See Investors' Rights Agreement in the Ruby legal glossary.
This page is general information about Canadian business law and is not legal advice. Laws differ by province and change over time, and how they apply depends on your circumstances. For advice on your situation, speak with a lawyer licensed in your province.
Need a Investors' Rights Agreement?
Ruby drafts it for a flat $799 CAD, confirmed before any work begins, with a licensed Canadian lawyer on every document.