Why it matters
Registration rights are standard. The aggressive version comes from three places: (1) low triggering thresholds — a 20% holder, rather than 50%, can demand a registration; (2) an aggressive demand window — registration rights kicking in earlier than 4-5 years post-investment; (3) the company paying the registration costs of the investor's piggy-back rights (these are real — often $1-2M for a single registration). Stacked, these convert IPO timing from a strategic decision into something a single investor can compel.
How to negotiate
Standard NVCA terms: demand registration available after 5 years post-closing or 6 months post-IPO; minimum 50% threshold to demand; maximum 2 demands; piggy-back rights but with a managing-underwriter cutback; company pays its own registration expenses, investors pay theirs. Time-box the rights so they expire on conversion to common (e.g. on a sale or after a public-market lockup expires).
Example language
How this clause typically appears in a term sheet. Read it carefully — predatory language is often buried in routine paragraphs.
Holders of at least twenty percent (20%) of the Registrable Securities may demand registration of their shares at any time after the third anniversary of the Closing, with the Company bearing all costs and expenses of registration including those of any participating Investor.
TURNSHEET provides intelligence, not legal advice. This page describes typical market behaviour and common negotiation tactics; your specific deal may have nuances that change the analysis. Always review your term sheet with qualified legal counsel before signing.