VC & PE Glossary
What Is Series Vote?
Updated
Definition
A series vote is a separate class vote where one series of preferred stock approves actions as a group — often required for charter amendments, new senior rounds, or changes affecting that series' rights.
Useful for: Founders, Investors
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
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Common questions
Short answers for founders, LPs, and operators