Participation Rights
Content
Definition
Participation Rights allow investors to retain their proportionate ownership in a company by participating in subsequent funding rounds.
Usage and Context
Participation rights let investors keep their ownership percentage in future funding rounds.
Frequently asked questions
- What are participation rights? Participation rights allow investors to maintain their ownership percentage in future funding rounds.
- What are pro rata rights for investors? Pro rata rights allow investors to maintain their ownership percentage in future funding rounds.
- What are preemptive rights vs pro rata rights? Preemptive rights allow existing shareholders to buy new shares first; pro rata rights let them maintain their ownership percentage.
Benefits
Participation rights protect investors from dilution, allowing them to maintain their ownership percentage.
Conclusion
Participation Rights protect investors from dilution, maintaining ownership percentage.
