Startup Funding Espresso -- Early Exit FAQ
Startup Boards -- Early Exit FAQ Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing. It\u2019s easy to get into a startup investment, but it can be hard to get out.\xa0 An Early Exit deal structure gives the investor a way out. The TEN structure uses redemption rights. What is a Redemption Right, and how does it work? A Redemption Right gives the investor or startup a right to redeem an ownership stake in the company.\xa0 What are the terms? The TEN Capital Early Exit term sheet includes a 3X redemption right, giving the investor the sole discretion over their right to 3X their investment at the three-year mark from the date of the investment.\xa0\xa0 Investor Sole Discretion means each investor makes their own decision.\xa0\xa0 Near the three-year mark, the investor will have 30 days to decide if they are going to take the redemption or refuse it.\xa0\xa0 If the investor takes the redemption, the payback will commence at the three-year mark.\xa0\xa0 If the investor refuses the right, then the convertible note will mature, and the investment will convert to equity.\xa0\xa0 In that case, the investor will then receive a return when the business reaches a liquidity event which is primarily by an acquisition of the company. Investors who take the redemption right will work out a payback plan with the startup. Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding.Let\u2019s go startup something today. ___________________________________ For more episodes from Investor Connect, please visit the site at: \xa0 Check out our other podcasts here: \xa0 For Investors check out: \xa0 For Startups check out: \xa0 For eGuides check out: \xa0 For upcoming Events, check out \xa0\xa0 For Feedback please contact info@tencapital.group\xa0\xa0\xa0 Please , share, and leave a review. Music courtesy of .