Tag-Along Right

A term allowing minority shareholders to join a sale by majority holders on the same terms.

Example

If founders sell a controlling stake, angels can sell their shares at the same price.

Important

Without it, minority holders can be left in a company controlled by a new owner.

Related terms

  • Drag-Along Right — A term allowing a specified majority of shareholders to require all others to join a sale of the company on the same terms.

Lessons that explain it

  • Board seats, vetoes, drag-alongs and anti-dilution decide who holds power in a crisis — Control terms rarely matter when a company is thriving. They matter in down rounds, disputed sales and restructurings - exactly when founders and small investors most need to understand them. (12 min)

All 578 terms in the Investing glossary