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well whats the drag along and a tag-along mechanism in private equity well lets say that Im the fund and Ive got 40 percent and the other founders have 60 percent and I received a good offer for my stake of 40 percent but the person making the offer is only really interested in buying a hundred percent a drag along means that if I if the offer is good enough and I receive that offer I can force you to sell your 60 percent along my 40 percent and the tag along is the mirror opposite of that if somebody comes to see with a good offer for your sixty percent the agreement allows me to tag along to you with your sale so that we can sell a hundred percent to that third party and therefore the objective of a tag and dragged along mechanism is that it improves the liquidity of a position which is a minority so a although I hold a minority position in the company at the mode of exit Im able to offer anybody who wants to buy a majority exit and that is an advantage to me as a private equity
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