How to improve cap table when the Investor does not want to buy anyone out?

searcher profile

March 03, 2023

by a searcher from INSEAD in Warsaw, Poland

Imagine this:

- an investor wants to buy shares of a target company, conditional to the cap table being readjusted, with shareholder-A selling her shares at pre-money valuation

- they want this to happen without any of their money going into shareholder-A

- other shareholders don't have the means to pay shareholder-A for her shares

Investor proposes that shareholder-A sells her shares to other existing shareholders, in return for a loan.

Anyone has experience of such situation?

Applicable law would preferably be UK law (under discussion).

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commentor profile
Reply by a professional
from Villanova University in West Chester, PA, USA
The company could buy out Investor A if it makes sense and complies with the corporate governance documents.
commentor profile
Reply by a searcher
in Houston, TX, USA
You buy them out.
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