What are reserved matters (investor consent rights)?
By SuLe · Updated 9 July 2026
Reserved matters — also called investor consent rights — are a defined list of significant company actions that cannot go ahead without investor consent. They typically cover issuing new shares, changing the articles or share rights, large borrowing or spending, disposals, related-party deals, senior hires and fires, and winding up. They give an investor a veto, not day-to-day control.
Key facts
- Reserved matters are a list of actions needing investor (or investor-majority) consent before they can happen.
- Common items: new share issues, changing the articles or share rights, disposals, borrowing above thresholds, related-party deals, budget approval, senior hires/fires, and winding up.
- They give a minority investor a veto over listed decisions, even without a board majority.
- They sit in the shareholders' or investment agreement, alongside — but distinct from — any board seat.
- The scope of the list and the consent threshold are the real negotiation.
What do reserved matters actually cover?
Reserved matters are the "you can't do this without asking us" list. They protect an investor's position against decisions that could change the value or nature of their investment.
A typical list includes issuing new shares, altering the articles or the rights attaching to shares, selling or acquiring significant assets, borrowing above a set figure, entering related-party transactions, approving the annual budget, hiring or firing senior staff, and winding the company up.
The point is protective, not operational: the investor is not running the company, but they can stop specific big moves that would affect them.
Do reserved matters hand control to the investor?
They give a veto, not control. The founders still run the business day to day and, if they hold the board, make ordinary decisions. But on any listed matter, the founders need the investor's sign-off.
For a minority investor, this is powerful. A 20% holder with reserved matters can block a new share issue or a sale of the company even though they cannot outvote the founders.
Whether that is reasonable depends on the list. A tight, protective list is normal; a sprawling one that reaches into routine hiring or modest spending effectively hands operational control to someone with a small stake.
What is a reasonable list, and where should I push back?
Aim for a list focused on genuinely major or protective items: share issues, changes to share rights, significant disposals or acquisitions, taking on material debt, and winding up. These affect every shareholder and are widely accepted.
Push back where the list reaches into ordinary operations — approving individual hires below board level, routine expenditure under a sensible threshold, or ordinary-course contracts. Those belong with management, not an investor veto.
Also negotiate the threshold: whether consent means one investor, an investor majority, or an investor director's vote. And set sensible financial limits so the veto triggers only on genuinely significant amounts.
Where does UK law fit?
Reserved matters are contractual, sitting in the shareholders' or investment agreement rather than in statute. They operate alongside the Companies Act 2006, which already reserves certain decisions — like amending the articles — to a special shareholder majority.
That statutory backdrop matters: some items on a reserved-matters list overlap with shareholder resolutions the Act already governs, while others are purely contractual add-ons. UK venture terms commonly follow the BVCA model documents, whose reserved-matters schedule is a familiar starting point that founders and investors negotiate down or up from.
| Reserved matter | Why investors want it | Founder push-back point |
|---|---|---|
| Issuing new shares | Protects against dilution | Carve out the agreed option pool |
| Changing articles / share rights | Protects their class rights | Reasonable — usually accepted |
| Borrowing above a threshold | Controls balance-sheet risk | Set a sensible, non-trivial limit |
| Senior hires / fires | Protects key-person value | Limit to board / C-level only |
| Disposals and acquisitions | Protects the business | Add a materiality threshold |
| Winding up | Protects against a forced exit | Reasonable — usually accepted |
Worked example
Sol and Bea run a B2B SaaS company and take £1.5m from a fund for 22%. The investment agreement gives the fund reserved matters, including consent over issuing new shares, borrowing above £100,000, and hiring or firing anyone at board level.
A year later, Sol wants to take a £250,000 bank loan to fund growth. Because it exceeds the £100,000 threshold, it is a reserved matter, so the founders need the fund's written consent before drawing it down.
The founders had, however, negotiated a carve-out: issuing options within the agreed pool does not count as a "new share issue" for reserved-matters purposes, so they can keep hiring on options without going back to the investor each time.
Where founders go wrong
Accepting a sprawling list
— vetoes over routine hires and small spends hand operational control to a minority holder; keep the list to major items.Ignoring the thresholds
— a £10,000 borrowing veto is unworkable; negotiate limits that trigger only on significant amounts.Forgetting the option pool carve-out
— without it, every option grant needs investor consent, which grinds hiring to a halt.Not checking the consent threshold
— "any investor" versus "investor majority" is the difference between one holdout and a workable process.
Related questions
What are reserved matters in an investment agreement?
They are a defined list of significant company actions that cannot happen without investor consent — typically issuing new shares, changing the articles or share rights, large borrowing or spending, disposals, related-party deals, senior hires and fires, and winding up. They are a control right, not an ownership right.
Do reserved matters give an investor control of my company?
Not day-to-day control, but a veto over the listed decisions. A minority investor with reserved matters can block those specific actions even without a board majority. The scope of the list and the consent threshold decide how much practical influence that gives them. [More: Should I give my investor a board seat?]
What is a reasonable list of reserved matters?
A tight list focused on genuinely major or protective items — share issues, changes to share rights, disposals, taking on significant debt, and winding up — is normal. Push back on items that reach into ordinary operations, like routine hires or day-to-day spending below a sensible threshold.
How are reserved matters different from a board seat?
A board seat gives an investor a voice and vote in board decisions; reserved matters give a veto over a specific list regardless of board votes. An investor may have one, the other, or both. Reserved matters can bind the company even where the founders control the board. [More: What founder protections should I negotiate in a term sheet?]
Reserved matters decide which decisions you can make alone and which need a phone call to your investor — and a list that quietly reaches into hiring and spending can hobble a young company. A SuLe solicitor can trim the list, set workable thresholds, and secure the carve-outs you need. Book a free term sheet review before you agree the consent rights.
Keep reading: Should I give my investor a board seat? · What founder protections should I negotiate in a term sheet? · What are information rights? · What should a shareholders' agreement include for a UK startup? · What are directors' duties under the Companies Act 2006? · What are drag-along and tag-along rights?
Primary sources: BVCA — model documents for UK venture capital · Companies Act 2006
