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Drag-Along Rights
Definition
A provision that allows majority shareholders (or lead investors) to force minority shareholders to join in the sale of the company on the same terms. Drag-along rights prevent minority holders from blocking an exit that the majority supports.
Related Terms
Related FAQ
What are tag-along rights and when would a founder use them?
Tag-along rights allow minority shareholders (founders) to participate in a transaction on the same terms as majority shareholders, preventing founders from being left behind in a sale.
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