Pro rata rights
The right to invest again in future rounds to maintain an existing ownership percentage.
Why it matters
Standard for meaningful investors, and genuinely useful to you: an existing backer exercising pro rata is a strong signal to new investors, while one declining it is a signal too.
A worked example
An investor owning 10% has the right to buy 10% of the next round to stay at 10% rather than being diluted.
What is typical
Usually granted to major investors above a share threshold rather than to everyone on the cap table.
Related terms
Lead investor
The investor who sets the terms, does the deepest diligence and usually takes the largest allocation.
Read more →Preferred stock
The share class investors buy, carrying rights that common stock does not have.
Read more →Run your raise on this
VCTerminal models these terms on your real cap table, so you can see what a term sheet pays you before you sign it.
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