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ArticleHow Do I "Buy Out" An Equity Holder Fairly?

How Do I "Buy Out" An Equity Holder Fairly?

Getting equity back from an existing stakeholder isn't easy — but it is possible.

It's a situation that very few Founders have ever been through before, so no one really knows how to go about it. Let's talk a bit about how the situation develops and what we can do to get some of that precious equity back into our coffers.

Remember, Equity is a Promise of Payment

More than anything, equity isn't just a stock issuance. It's a promise that at some future point that stock will be worth cash money — maybe.

When we think about pulling the equity back, we have to think in terms of how to redeem that promise of payment in some capacity. It's not just a matter of "taking it away" per se, it's a matter of trading the terms of the initial agreement ...


 
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