Business Pitch Dictionary by pitch.dog
Term-sheet control & investor rights · Core

Protective provisions

Also called: veto rights

ELI5

Investors can stop certain major decisions without their approval.

Used in conversation

“The protective provisions cover new senior securities and a sale.”

Definition

Consent rights allowing preferred holders to block specified major corporate actions.

Here “Protective provisions” means: Consent rights allowing preferred holders to block specified major corporate actions.

Pitch context

You will see “Protective provisions” in fundraising decks, data rooms, term sheets and investor conversations when the discussion reaches term-sheet control & investor rights.

Why it matters: In term-sheet control & investor rights, a loose definition can change rights, obligations, approval, disclosure or enforceability.

Caution

Meaning, enforceability and required process vary by jurisdiction and agreement; this definition is not legal advice.

Sources & evidence · 5

Direct term-level sources and supporting source families.