Deal StructureLegal
Tag-Along Rights
Also known as: Tag-along provision, co-sale rights, piggyback rights
A minority holder's right to participate in a sale on the same terms as the majority holder. Sounds protective but offers limited value when the majority controls every dimension of the transaction.
WHY IT MATTERS
Tag-along rights let a minority equity holder participate in a sale on the same terms as the majority holder. The protection sounds fair — the founder gets the same deal. But when the majority holder (the PE firm) controls the timing, the buyer selection, and the negotiation, the protection is circular. The founder gets to come along on a ride they had no say in planning. Tag-along rights are meaningful only when paired with consent rights on major decisions, independent valuation requirements, and minimum return thresholds. Without those, the founder's tag-along right is a seat at a table someone else set.