Drag-Along Rights
A clause letting majority shareholders force minority shareholders to join a company sale.
Drag-along rights ensure a sale isn’t blocked by small shareholders — if a defined majority agrees to sell, the rest must follow on the same terms. This makes exits cleaner and is standard in shareholders’ agreements.
Examples
Majority holders trigger drag-along to complete an acquisition. — Investors require drag-along before investing.
How it relates to The Startup Foundry
Understanding these standard terms is part of being deal-ready with the Foundry’s investors.