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Clauses for an Agreement related to Venture Capital


02-Mar-2023 (In Corporate Law)
A company is right now not making any profits and likely not providing any exit to the existing investors. The investors decided to give back the shares to the company for free on a condition that if it would be profitable in future then the company has to give back those shares back to the investors. How can an Agreement be drafted on basis of this? is this even possible?
Answers (1)

Answer #1
980 votes
From a commercial standpoint, it seems strange that the investors want to give the shares for free with an option of reassignment in the event the company becomes profitable. It makes more sense to hold on to the shares rather than giving them away for free right now since the investors are not gaining anything from this.
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