What Is a Pro-Rata Right? with Peter Harris

What Is a Pro-Rata Right? with Peter Harris //

Are you interested in investing and curious about pro-rata rights? Have you heard of them but wondered, what is a pro-rata right? Watch this video as a venture capitalist dives into the specifics of pro-rata rights so you can understand exactly what the pros and cons of pro-rata rights are.

Next, watch What Is the Difference Between Hedge Fund and Private Equity | A VC Explains with Peter Harris

#prorata #venturecapitalist #peterharris

[amitrikhi]

Peter, thanks for the videos! I'm a bit confused on the additional $500k investment to continue to own 5% of the company. Wouldn't it be an additional $1.5M? (5% of $50M post valuation is $2.5M. The investor already put in $1M.) It's late and I might be missing something super simple- haha!

[nicholasdulait]

Hey Peter thanks for this video, just had a quick question if you don’t mind. I’m planning on doing a 25% discount SAFE (uncapped) as a pre-seed. As I know it is a funder friendly option… would a pro-rata with 10% discount (only for the next round) be more favorable for the investors ? Thanks !

[Dylan-crub]

Hey Peter, thanks for the video. Basically you just need to do financing raised divided/ by the equity ownership for the post money valuation percentage and the Pro Rata means that you can buy more shares in proportion to the company's value. But at 4:28 i don't really understand how you got that $5M of that $400M, isn't it supposed to be $20M to maintain 5% ownership because 5% of 400M = $20M?