Startup Terms Glossary
What is Drag Along Rights?
Drag along rights give a startup’s majority shareholders the authority to force out minority shareholders. They achieve this objective by requiring them to sell their startup shares. The drag along rights afforded are usually specified in a specific provision when purchasing equity and typically require a single or double trigger event to occur.
Drag Along Rights Examples
Examples of drag along rights triggers include:
- Example 1. Switching from preferred to common stock
- Example 2. Transactions involving more than 50 percent voting power
- Example 3. Startup consolidations
- Example 4. Mergers and acquisitions
- Example 5. Sale or transfer of a major company asset
Learn about drag along rights on this page .
Meet some of our Startup Lawyers
Tabetha H.
I am a startup veteran with a demonstrated history of execution with companies from formation through growth stage and acquisition. A collaborative and data-driven manager, I love to build and lead successful teams, and enjoy working full-stack across all aspects of the business.
Orin K.
I'm an employment lawyer. I counsel and represent employees in all professions, from hourly workers to doctors and executives, and all in between. I also counsel and represent employers in many aspects of employment law.
Elbert T.
Elbert Thomas is the founder of the Thomas Law Group, LLC. Elbert is proficient in contract creation, drafting, reviewing, and negotiating various business contracts and demand letters in industries such as construction, personal, professional services, non-profits, and real estate. Elbert typically represents small and large companies in drafting and negotiating countless agreements such as purchase sale agreements, interconnection agreements, lease agreements, demand letters, cease & desist letters, transfer of deeds in real property, and merger/acquisition agreements. In addition, Elbert is also experienced in start-ups, small business formation, drafting operating agreements, and estate planning.
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Reuben O.
As an entrepreneur at heart, I enjoy working with business owners and executives on a variety of corporate matters, including mergers and acquisitions, corporate financing, corporate governance, public and private securities offerings, privacy regulation and early-stage corporate matters including formation. As a lawyer and business professional, I understand the value of providing personal service and focused legal answers to clients navigating a rapidly changing regulatory environment. Whether in Aerospace, Consumer Goods, or Technology, I find great success in work collaboratively with clients to strategical structure their business or implementing strategic growth-oriented financing opportunities.
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Thaddeus W.
Experienced legal counsel to entrepreneurs, small businesses, and investors. Advising clients starting, buying, selling, operating, financing, and investing in businesses // U.S. Army Veteran // Ironman Triathlete, Marathoner, Open Water Swimmer, USAT Triathlon Coach // Lover of Dogs, Cribbage, Craft Beer, Bourbon, and Cigars
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Nichole C.
Licensed attorney in KY and Federally JD, 2006 University of Louisville MBA, 2006 University of Louisville BS, 2001 Berea College Licensed Title Agent Arbitrator and Certified Mediator Business Consultant Adjunct Professor, Law and Business
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