Glossary
Reserved Matters
Decisions that require investor approval even if they hold a minority stake — typically covering financing, M&A, hiring, and material spending.
By Amit Tyagi, Fitoor Capital · AletheiaAI Glossary
Definition
Reserved Matters (sometimes called investor consent rights or affirmative vote rights) are specific decisions that require investor approval regardless of ownership percentage. Listed in the Shareholders Agreement, they give minority investors blocking rights on a defined set of decisions.
Typical reserved matters: future financing rounds, M&A transactions, material asset sales, founder departures or compensation changes, budget approval, debt issuance above a threshold, ESOP plan changes, related-party transactions, and material changes to business plan.
India Context
Indian term sheets in 2026 typically list 12-25 reserved matters. The list is heavily negotiated — fewer items is founder-favourable. Most contentious reserved matters: budget approval (founder wants flexibility), founder compensation changes (founder wants autonomy), and "any other material change in business" (vague catch-all that investors can interpret broadly).
Founder-friendly Indian deals limit reserved matters to clearly defined major decisions; investor-friendly deals expand the list to operational matters that should be management discretion.
Example
A typical Series A SHA: investor with 18% ownership has reserved matters covering future financing rounds, M&A transactions, founder departures, ESOP plan amendments, debt above ₹2Cr, related-party transactions above ₹50L, and material business pivots. Without reserved matters, the 18% holder couldn't block any decision the 82% majority approves.
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