An Oversubscription Privilege is a right given to the current shareholder(s) of a startup that allows them to receive or purchase extra shares (usually above their pro rata amount) from those left over after a round of financing. There are extra shares because other shareholders did not purchase the allotment to which they had a right. In other words, shareholders usually have a right to retain their percentage of equity in a subsequent financing and if certain shareholders do not wish to do so, the shares that they did not purchase can be purchased by the other shareholders.
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