She Has Leverage

Portfolio strategy concepts

Pro-rata

A pro-rata right is an existing investor’s contractual right to buy enough securities in a later financing to maintain its ownership percentage, subject to the financing documents and applicable limits.

Example: If a fund owns 5% and can exercise pro-rata rights in a $20 million round, its proportional investment would be $1 million.

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Knowing the language helps you follow the conversation. Knowing what to ask is how you participate in it.

Understanding the terms is a first step. The Aligned Capital Program uses them to teach you how to evaluate a fund and prepare the questions to ask its manager.

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