When venture investors make an investment they buy a new class of shares that are created by the company.  These shares are designed to have different rights than common shares (the shares that are initially created by the company). 

These rights are created to protect the investment of the investor, which usually involves obtaining control over decisions in relatively extreme situations and structuring aspects of the company's finances to ensure that management and the investors have aligned incentives.

While some investors like to create special rights, by-in-large these structures are relatively boiler plate.  At their core, many investors offer essentially the same terms and have been doing so for several decades.

In the following posts - I will describe the key characteristics of these terms and why venture investors offer them.