Protect Yourself in a Fire Sale: Get a Carve-Out in Writingby@russ.wilcox
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Protect Yourself in a Fire Sale: Get a Carve-Out in Writing

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Entrepreneurs should ask for a written carve-out in writing before they start shopping the company. The Board creates a “carve-out” so that 5-10% of the exit price, no matter how low, will go into a pool. If the company looks like it has a decent chance of being sold as a going concern, then the Board may put in place stay bonuses for the senior team, so that the business can be shopped as a functioning company until the last moment of cash remaining.

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@russ.wilcox

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Partner at Pillar VC and Founder of E Ink


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