There is a longer post required for this larger drags/tags issue but one question (selling) came up that I thought I could answer quickly.
People have asked me what I did about the case where one party wants to sell and the other side doesn’t. This comes up often because each side’s financial motives/objectives can be different.
In my case, we had a discussion centered around “What would make you happy” on an numbers basis. You are committing 300k so would a 3x return on a cash in/out basis make your LPs happy? Yeah? Okay, here’s what we do. For a 3x or better return on a cash in/out basis either side can ring the bell (hit the bid) and we’re done, winner! Below a 3x return both of us have to agree. Lawyers turn that into exact language and let’s go.
I’m prepared to accept the risk that I’ve got the next Google and we sell out too quick for the sake of being investor friendly. And since my actual cash is right next to theirs, I can live turning a dollar into 3. So can my CFO.
Simple. Keep it simple.
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