What happens if an investor doesn't participate in acquisition round?

investor profile

February 15, 2021

by an investor from Lewis and Clark College in Ashland, OR 97520, USA

Does an investor end up with any equity if they participate in the search funding but don't add any money to the acquisition round? Is there a requirement or expectation that you participate in in the acquisition round?

0
1
122
Replies
1
commentor profile
Reply by a searcher
from Drexel University in Philadelphia, PA, USA
I would assume you would have a clause in your LP agreements around the issue. In my "fund" my LP's fund a small amount <1% of the deal up front (nonrefundable). When I bring them a deal they have 3 chances to participate. If they say "no I don't like it" on 3 different deals then we amicably part ways and they don't get their <1% deposit back.
Join the discussion