# Pro rata rights

Concept · [Fundraising and equity](https://ecosystem.samcarlton.com/fundraising)

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

An investor's right to buy enough [shares](https://ecosystem.samcarlton.com/equity) 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](https://ecosystem.samcarlton.com/equity) and stay at 5 percent.

## Connects to (4)

- [Dilution](https://ecosystem.samcarlton.com/dilution): When the company creates new shares, each existing owner's percentage gets smaller, even though the number of shares they hold stays the…
- [Priced round](https://ecosystem.samcarlton.com/priced-round): A fundraising round where investors buy shares at a set price per share, which fixes the valuation of the company.
- [SAFE](https://ecosystem.samcarlton.com/safe): Simple agreement for future equity.
- [Cap table](https://ecosystem.samcarlton.com/cap-table): Short for capitalization table.

> 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.

Map view: https://ecosystem.samcarlton.com/pro-rata