Tag-Along Threshold
Private Equity glossary · Private Equity Fundamentals
Definition
Minimum percentage of shares sold by majority that triggers tag-along rights for minority holders.
Tag-Along Threshold in plain English
A tag-along right (the ability of a small owner to sell alongside a big owner on the same terms) usually only kicks in when the sale is big enough to matter. The tag-along threshold is that trigger point, for example 'this right only activates once the majority sells at least 30% of the company.' The idea is that tiny, routine share sales shouldn't force everyone into the deal, but a large, control-shifting sale should let the little guys come along too. Think of it as the minimum size the sale must reach before your 'me too' option switches on.
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