Pro-Rata Rights in VC: Follow-On Investing, Explained
Pro-rata rights let investors maintain ownership by participating in future rounds. Here's how pro-rata mechanics, super pro-rata, and fund reserves actually work.
Venture Capital Deal Terms & Term Sheet Guides
Deal terms determine who wins in exit scenarios and how much control investors have over company decisions. Our deal-terms guides explain the economics and governance provisions founders encounter in seed through growth rounds.
Key Deal Terms Explained
- Valuation & equity: Pre-money, post-money, and option pool sizing
- Liquidation preferences: Participating vs. non-participating, multiples
- Control rights: Board seats, protective provisions, and veto rights
- Investor rights: Pro rata, information rights, and drag-along provisions
Read venture capital deal terms explainers below.
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