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I'm having a hard time understanding why they want the money back if they're taking so much equity. If the company is at all successful the 6% equity will be wo
by tlrobinson 16y ago
I'm having a hard time understanding why they want the money back if they're taking so much equity. If the company is at all successful the 6% equity will be worth wayyy more than £20,000. If the company fails they get nothing, not even the loan repayment.
I suppose it protects them against so-called "lifestyle businesses" that never have a big exit.
- ryancarson 16y agoSupposedly it allows the money to be recycled back in to the fund. This might make sense if it was in the millions but as you said, it's a very small amount (in investment terms) so that argument seems strange.
- edanm 16y agoEven with companies that have an exit, it might take years, during which the companies could well afford to pay back the money.