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An options clause, usually - giving the founder the right to buy back the company/brand at a fixed price - it's enticing to new owners too because it mitigates
by DaiPlusPlus 9y ago
An options clause, usually - giving the founder the right to buy back the company/brand at a fixed price - it's enticing to new owners too because it mitigates their risk (e.g. if they run it into th ground while the old owner is interested in it, then it will limit their losses) - the difficulty then is not making the buyback price too high that the original owner can't afford it, or if the new owner screws it up so badly that the original owner loses interest.
- DINKDINK 9y ago>giving the founder the right to buy back the company/brand at a fixed price Selling a call does not allow the buyer to hedge. Buying a put would but not selling a call. You are describing selling a call.