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Don't investors usually have a veto over acquisitions? I'm which case, why would they agree to a deal which was lucrative for management but valued their equit
by cperciva 10y ago
Don't investors usually have a veto over acquisitions? I'm which case, why would they agree to a deal which was lucrative for management but valued their equity at zero?
- beachstartup 10y agoprobably because the acquisition would not happen at all without the employee retention, and the investors had a mandate to exit for whatever reason. or management simply hijacked the company.
- jdavis703 10y agoI've been an insider in a similar deal. A lot of times it's this, or let the company go through a messy, potentially headline grabbing, bankruptcy. A lot of times in this situation the acquiring company is doing the deal for the talent, and they need to be sure the talent stays around for a while, otherwise the deal would be worthless.