Investor rights
What is Pro-rata Rights?
An investor's right to participate in future rounds to maintain their ownership percentage.
Pro-rata rights let an existing investor purchase enough of a new round to keep their current ownership percentage. Without pro-rata, investors get diluted by each subsequent round; with it, they can write a check to defend their position. Pro-rata is standard for lead investors and increasingly common for smaller checks too. Companies sometimes negotiate 'super pro-rata' (more than current % participation) with strategic investors.