Startup Investing

Pro Rata Right

Definition

What is Pro Rata Right?

The right to invest in later rounds to maintain an ownership percentage.

Example in practice

An investor uses pro rata rights to keep a 10% stake.

Keep learning

A preliminary document outlining the main commercial terms of a proposed investment.

A company's agreed value immediately before a new investment.

A company's value immediately after adding new investment capital.

The rate at which a company spends cash, commonly measured monthly.

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