A series vote lets a specific preferred class approve or block actions that materially affect that series — independent of other shareholders.

How it works

Charter and voting agreements list triggers: issuing stock senior to a series, changing liquidation preference, increasing authorized shares of that series, or waiving anti-dilution. Each affected series must vote — often by majority of outstanding shares of that class.

This differs from a general preferred vote (all preferred together) or common approval. Series votes protect Series A from Series B terms that subordinate A without A’s consent.

Recap negotiations often involve trading concessions — board seats, information rights, partial payouts — for series vote waivers.

Why it matters

• Founders: A blocked recap can force bankruptcy or fire-sale M&A. Map series vote holders early when planning distressed financings.
• Investors: Series vote rights are bargaining chips; waiving them requires understanding new economics vs status quo.

Common mistake

Assuming the board alone can approve a down round — charter series votes can stall deals until every affected class signs off.

Related ideas

• Protective provisions and class votes
• Senior preferred
• Shareholders agreement