Pro rata rights

Also called: pro rata, pro-rata, prorata, pro rata right, participation right, follow-on right

An investor's right to buy enough shares in a later round to keep the same percentage of the company.

For example: An investor owns 5 percent of a company. In the next round, pro rata rights let that investor buy 5 percent of the new shares and stay at 5 percent.

Connects to 4

Dilution Concept
Priced round Concept
SAFE Concept
Cap table Concept

This glossary is plain-language orientation, not legal or financial advice. Before you decide on a company structure, a contract, taxes or a fundraising deal, talk with a lawyer or an accountant.