Article · 25 min read

Term Sheet Drafting for Indian Startups: Clauses, Compliance and 2025 to 2026 Updates

iPleaders editorial team · iPleaders (LawSikho) Free Intermediate India

The India-specific piece that names the exact trap in your answer: affirmative rights and reserved matters that let a small investor veto hiring, budgets, and your next round. It gives concrete founder-side defaults (split reserved matters into 'consent required' vs 'information only', set capex consent thresholds high enough that normal operations do not need a sign-off, refuse caps on founder pay and junior hiring) so you know what is standard vs aggressive in an Indian SHA.

  • Reserved matters (the Indian home of affirmative rights) run 18 to 25 items; split them into 'investor consent' vs 'information only' so a 10 percent holder cannot deadlock operations
  • Set consent thresholds (capex, debt) high enough that day-to-day running never needs investor sign-off, and refuse caps on founder comp and junior hiring
  • Post-2022 investors push wide 'bad leaver' triggers and broad vetoes; narrow them, because in India these rights live in the binding SHA, not just the term sheet
Open on blog.ipleaders.in ↗

The question it answers

  1. An investor keeps asking for information rights and a board seat in the term sheet. What should I actually give a seed investor?

Read with it

  1. This is the founder-side reference that draws the exact line you need: it says outright that not every seed investor takes a... The Holloway Guide to Raising Venture Capital Article · 15 min read Board Seat Holloway (with Alex MacCaw and startup counsel)
  2. A lawyer-written plain-English breakdown of the three rights an investor bundles into one ask, so you can unbundle them at the... Built In Article · 10 min read Founder Cheatsheet: Information, Inspection and Observer Rights in a Venture Financing Becky Mancero
eChai Partner Brands The partnership →