Pro-Rata Rights
An investor’s right to invest in future rounds to maintain their ownership percentage.
Pro-rata (or pre-emption) rights let existing investors buy enough new shares in later rounds to avoid dilution. They are valuable to investors who want to keep backing winners and are a standard term. Founders should track these rights as they affect how much room is left for new investors in future rounds.
Examples
A seed investor exercises pro-rata rights to keep their 10% stake in the Series A. — A fund reserves capital specifically for pro-rata follow-ons.
How it relates to The Startup Foundry
As your Foundry-network investors back your early rounds, understanding pro-rata helps you plan future raises and keep your cap table investable.