co-sale rights

Definition

Also called tag-along rights, these allow minority shareholders to join a sale transaction if majority holders are selling their shares. The 'if you're abandoning ship, I'm coming too' clause.

Example Usage

When the lead investor negotiated a secondary sale, our co-sale rights let us liquidate 20% of our holdings too.

Origin

Corporate law protection for minority shareholders, standard in VC deals since the 1990s

Fun Fact

Co-sale rights prevent the classic private equity move of selling to someone terrible and leaving minority investors trapped with the new owner.

Source: Corporate governance and minority shareholder protections

Related Terms

Intermediate

Churn Rate

The percentage of customers who cancel your service each month, also known as the number that keeps founders awake at 3 AM. A high churn rate means your product is a revolving door; a low one means customers haven't figured out how to find the cancel button yet.

🚀 Startup / VC

Intermediate

Exit Strategy

The plan for how founders and investors will eventually cash out, ranging from IPO to acquisition to quietly shutting down and pretending it never happened. It's planning your escape route before you've even built the building.

🚀 Startup / VC

Intermediate

cockroach startup

A resilient company that survives on minimal resources and refuses to die despite market conditions that would kill competitors. They're scrappy, resourceful, and nearly impossible to eliminate.

🚀 Startup / VC

Intermediate

seedbed

A literal plot of dirt prepped for seeds, or metaphorically, any environment ripe for nurturing nascent ideas—like Silicon Valley for startups or your uncle's garage for questionable business ventures. In startup parlance, it's where brilliant innovations and terrible ideas alike take root before anyone can tell which is which. The key difference from an incubator? Seedbeds are cheaper and smell more like actual dirt.

🚀 Startup / VC

Intermediate

prospectus

The glossy sales document that makes every investment opportunity look like the next Amazon and every university look like Hogwarts, carefully balanced between legal obligation and marketing fantasy. In startup land, it's the formal document that transforms 'three guys in a garage with an app idea' into 'disruptive technology platform poised for exponential growth.' Every prospectus contains enough disclaimers to absolve everyone of everything while somehow still convincing you to hand over your money.

🚀 Startup / VC

Advanced

catch-up provision

A term in VC fund agreements where once LPs get their initial investment back, GPs get an accelerated share of profits until their normal split is reached. Basically letting the manager 'catch up' to their 20% after paying back investors.

🚀 Startup / VC

Translate This Term

See “co-sale rights” in Corporate Speak, Gen-Z Slang, Pirate Speak, and more.

Try the Translator

Share This Term

Post on X Share on Facebook Share on LinkedIn

Discover a Term

Intermediate

pop punk

A musical genre that took punk's rebellion, gave it a shower, some hair gel, and a record deal. Born in the '90s, it's p...