Drag-along rights let a majority of shareholders, usually including major investors, force minority shareholders to agree to a sale of the company on the same terms, preventing a small holdout group from blocking an otherwise approved deal.
Without this provision, a single shareholder or small group with enough voting power could theoretically block an acquisition the rest of the company wants to accept, holding the deal hostage for better personal terms. Drag-along rights are standard in most venture financing documents specifically to prevent that outcome.
For a founder, this cuts both ways: it protects a deal the founder wants from being blocked by a small dissenting shareholder, but it also means a founder who disagrees with a sale investors want can potentially be dragged along too, if they don't hold enough of the company to block it themselves.
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