What to consider for equity agreements?

by a searcher from University of Pennsylvania - The Wharton School

2 months ago

I’m considering a deal where the owner wants to keep a 5% equity stake and serve as an advisor. I am creating a consulting agreement with a monthly cap on hours and expectations. The goal for the owner keeping the stake is to help with a growth strategy and lessen our debt burden. Has anyone done something similar? Any pros/cons and insights you can offer?

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searcher from University of Pennsylvania - The Wharton School

Interesting insights and questions! I am also considering an equity stake for a deal, and this is very informative.

2 months ago | like reply | 0 likes

intermediary from The University of Chicago - Booth School of Business

The mechanics and economics of 5% under SBA are discussed here in SF in many threads. It's not as simple as it sounds. First get comfortable with that before going too far. I am going to be bold and say 90% of searchers and many others do not understand this.

2 months ago | like reply | 0 likes

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