Most favoured nation
Did another investor get a better deal than me?
Also called: MFN · Side letter election
Favours the receiving party
What it does
Requires the manager to disclose side-letter terms given to other investors and allows an electing investor to adopt them, usually subject to a commitment-size threshold.
Why it matters
Side letters are where the real terms live. Without an MFN an investor has no way to know what others were given, and no mechanism to match it.
What to watch for
- A commitment threshold set above what you are actually investing
- Broad exclusions — anything 'specific to' another investor's regulatory or tax position
- Disclosure of a summary rather than the letters themselves
- A short election window running from a notice you may not be watching for
- Exclusion of the fund's cornerstone or anchor investor entirely
What to ask for
- A threshold at or below your own commitment
- Full copies of side letters, not summaries
- A reasonable election window with a clear start date
- Exclusions limited to genuinely investor-specific regulatory and tax provisions, listed exhaustively
How common is it
Documents filed with the SEC containing the exact phrase “most favored nation”.
View as a table
| Year | Documents |
|---|---|
| 2019 | 1,534 |
| 2020 | 1,774 |
| 2021 | 4,098 |
| 2022 | 2,862 |
| 2023 | 2,785 |
| 2024 | 2,568 |
| 2025 | 2,772 |
Real filings using it
- AltC Acquisition Corp. (OKLO) (CIK 0001849056) — S-4, 2024-04-15
- AMERICAN BATTERY MATERIALS, INC. (BLTH) (CIK 0001487718) — 10-Q, 2024-11-14
- Complete Solaria, Inc. (CSLR, CSLRW) (CIK 0001838987) — 8-K, 2024-07-23
Source: SEC EDGAR full-text search (efts.sec.gov). Retrieved 2026-08-30. Counts are filed documents matching an exact phrase, not deals, and EDGAR indexes public-company filings — read these as public-company practice, not as evidence of what private mid-market agreements contain.
What usually gets agreed
Tiered MFN by commitment size, with disclosure of redacted letters and exclusions for regulatory and tax-specific terms, is the usual landing point. Anchor investors are commonly carved out and that is difficult to move.
Related
- Key person provision — Suspends the fund's investment period if named individuals stop devoting time to it.
- GP clawback — Requires the manager to return excess carried interest at the end of the fund's life.