party to the exit

Definition

A shareholder who has contractual rights to approve or block an acquisition or IPO, giving them veto power over exit decisions regardless of ownership percentage. Democracy in action, if democracy meant a small group could overrule the majority.

Example Usage

Our Series B lead investor is a party to the exit, so we need their approval on this acquisition offer even though they own only 15%.

Origin

Corporate governance and transaction terminology from venture capital agreements

Fun Fact

Being a party to the exit is distinct from having drag-along rights—it's defensive rather than offensive power over exit decisions.

Source: Venture capital term sheets and transaction documents

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