Subscription credit facilities usually require the ability to make, receive, and enforce capital calls on a pro rata basis, whether directly or indirectly through a cascading pledge structure, on 100% ...

In the context of a term sheet, pro rata rights (or pro rata) govern whether investors may continue to invest in subsequent rounds of funding in proportion with their ownership. Investors with pro ...

The United States Court of Appeals for the Fifth Circuit (the “Fifth Circuit”) ruled on December 31, 2024 that Serta Simmons Bedding’s (“SSB”) 2020 uptier exchange included a transaction that, ...

Pro rata rights or proportional rights let existing investors keep their ownership stake by investing more when a company raises funding. Pro rata rights, sometimes called proportional rights, are ...

Will Kenton is an expert on the economy and investing laws and regulations. He previously held senior editorial roles at Investopedia and Kapitall Wire and holds a MA in Economics from The New School ...

Lee Edwards, partner at Root VC, has a saying at his firm that “pro rata rights are earned, not given.” That may be a bit of a stretch since pro rata refers to a term that VCs put in their term sheets ...