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Also known as: tag along, co-sale rights

Tag-Along Rights

TechnicalLegalFundraising

Definition

Tag-Along Rights: Tag-along rights allow minority shareholders to join a sale initiated by majority shareholders, selling their shares on the same terms. This protects minority investors from being left behind when major shareholders sell their stakes.

Example Usage

“When the founder sold 10% of their shares in a secondary, minority investors exercised tag-along rights to participate.”

Common Misconceptions

Tag-along applies to all sales. It typically only applies to sales above a certain threshold.
Tag-along means you must sell. It gives the right to sell, not an obligation.
Only investors get tag-along. Some structures give employees tag-along rights too.

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