Re:The Fatal Pinch
by danieltillett on Tuesday December 09, 2014 @12:33AM
(#8721200)
They could always agree to return the cash if they didn't need it. I guess it would depend on the agreement signed.
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That would be an exceedingly weird financial term. In effect, it would commit the investors to fronting cash, but give the managers an option as to whether and when to accept the cash at the agreed price (and deliver shares) or to reject some or all of it (and return cash).
Just from practice, you'll never see this from normal (professional or practiced) startup investors. Nor will you see its identical twin, the required second tranche.