In structuring an initial equity investment and the subsequent stockholder arrangements entered into immediately before a portfolio company’s initial public offering, our private equity fund clients often ask, “What rights and obligations should we have after the IPO that are different from the public stockholders?”. Should the private equity funds retain their rights to nominate (and obligations to vote for) directors and their tag-along rights, drag-along rights, veto rights and other provisions after public stockholders have acquired a meaningful ownership position? These issues can be particularly difficult in a “club deal” (i.e., a portfolio company with multiple private equity fund investors).


This communication, which we believe may be of interest to our clients and friends of the firm, is for general information only. It is not a full analysis of the matters presented and should not be relied upon as legal advice. This may be considered attorney advertising in some jurisdictions. Please refer to the firm's privacy notice for further details.