Glossary · Investor rights
Drag-along rights
A clause that lets a majority of certain shareholders force smaller holders to sell in an acquisition everyone approved. It helps buyers get 100% of the company without chasing every tiny holder.
Related: Exit · Preferred stock · Term sheet · Tag-along rights
A bit more nuance▾
- Founders should understand when they can be dragged — and at what price protections exist.
- Tag-along is the sibling right: small holders can join a good sale.
Go deeper▾
Discussion questions▾
- What minimum price should trigger a drag?
- How do you protect employees with options in a drag scenario?
Educational reference only — not legal, tax, or investment advice. Terms vary by country and deal; ask a qualified professional when it matters.