What are tag-along rights?

Tag-along (co-sale) rights let other shareholders sell alongside a founder or major holder who has found a buyer for their shares, on the same terms and pro rata. They prevent insiders from getting liquidity that other shareholders cannot access.

In practice tag-along rights matter in secondary sales: if a founder sells part of their stake, tagging investors may take part of the allocation. The mirror image of drag-along, which compels a sale rather than permitting one.