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    Drag-Along and Tag-Along Rights

    Stockholder agreement provisions that compel minority holders to join a sale (drag) or entitle them to participate pro rata in a major holder's sale (tag).

    Reviewed by Christian Espinosa, Founder, Blue Goat CyberLast reviewed May 9, 2026

    Definition

    Drag-along rights allow specified majority stockholders (typically the board plus a preferred-stock supermajority) to compel minority stockholders to sell their shares on the same terms in a qualifying sale of the company, ensuring a buyer can acquire 100% of the equity. Tag-along (co-sale) rights give minority stockholders the right to participate pro rata in a large stockholder's sale to a third party, preventing founders or early investors from cashing out at a price the smaller holders cannot access. Both are standard NVCA-form provisions.

    What this means in practice

    MedTech founders should understand drag thresholds carefully; they determine who must agree to a sale. Tag-along rights are especially important to early angels and seed investors.
    Common pitfalls
    • •Setting a drag threshold so high (e.g., requiring common-stockholder supermajority) that a clean exit becomes structurally hard.

    Primary references

    3 sources
    Link health: 2 verified 1 bot-blocked· last checked 2026-05-09
    NVCA·1DE Code·1PitchBook·1
    1. 1
      NVCA Model Legal Documents
      Verified
      NVCAnvca.org
    2. 2
      Delaware General Corporation Law (Title 8)
      Verified
      DE Codedelcode.delaware.gov
    3. 3
      PitchBook - MedTech Coverage
      Bot-blocked
      PitchBookpitchbook.com

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