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If they didn't sell, they would keep all future profits but not exchange the underlying equity for cash.
by giaour 7y ago
If they didn't sell, they would keep all future profits but not exchange the underlying equity for cash.
- icebraining 7y agoBut they aren't exchanging it for cash, they are exchanging it for future profits ("They’ll pay us (...) from the company’s future profits") - which they would get anyway. No?
- giaour 7y agoI may have been reading it wrong, but my understanding was that they would be exchanging their equity for a fixed dollar amount, to be paid from future profits. If they didn't sell, they would continue to receive a fixed percentage of profits. Essentially, they're converting their equity into a loan.