Most of us have heard this mantra before. Here is my question to the community: How do you plan for an equity partner wanting to cash out of a deal earlier than makes sense? I agree it's better to have something than nothing, but as the person putting the work into setting up a deal, if your partner wants out too soon it what should be a buy and hold deal, it could mean trouble. The only idea I have is to contract them to stay in a certain length of time, however my question is more about the investor wanting to get out of this kind of commitment.
Follow-up questions:
Prevent them from selling to someone you don't want to partner with?
What if you yourself don't have cash to buy them out?
If equity partner is friend/family do you take the loss to preserve relationship?
Has anyone used a financial penalty for getting out early?
Thanks all!
Eric
