At the turn of the century, a pay-to-play provision was rarely seen. After the bubble burst in 2001, it became ubiquitous. Interesting, this is a term that most companies and their investors can agree on if they approach it from the right perspective.
In a pay-to-play provision, an investor must keep “paying” (participating pro ratably in future financings) in order to keep “playing”(not have his preferred stock converted to common stock) in the company.
We'd love to get your feedback on how to improve these resources and your suggestions for any articles that you'd like to see featured. Contact us with feedback and suggestions on [email protected]