Two clauses that decide what happens to minority owners when the majority sells. They point in opposite directions and are usually negotiated together.

Drag-along

Lets a selling majority compel the minority to sell on the same terms. It exists because most buyers want 100% of a company and will discount heavily, or walk, if a dissenting minority can remain.

Points that matter: the ownership threshold that triggers it, whether the minority must accept the same terms exactly, what representations and indemnities they can be required to give, and whether there is a price floor.

Tag-along

The mirror image, protecting the minority. If the majority sells, the minority may join on the same terms rather than be left holding a stake in a company with a new controlling owner they did not choose.

Points that matter: whether it applies to any sale or only a change of control, whether it is pro rata or full, and whether it survives a partial sale.

Why both

A company with a drag and no tag lets the majority both force a sale and take a better deal for itself. A company with a tag and no drag can find a sale blocked by a small holder. The pair together is what makes a stake in a private company sellable at all.

The recurring failure

Thresholds that do not match the ownership table — a drag requiring 75% in a company where the majority holds 70% is a clause that can never be used.