A pro-rata side letter to an investment agreement is a document that outlines the rights and obligations of the parties with respect to the pro-rata allocation of investments. This document typically covers the following topics: the amount of the investment, the percentage of the investment that each party will receive, the terms of the investment, and the consequences of a breach of the agreement.
This pro rata side letter is an optional companion to YC's Postmoney Safe (Seed) Share Subscription with a valuation cap. The letter gives the investor the right to purchase its pro rata share of Standard Preferred Stock being sold in the Equity Financing.
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