Equity stake in business

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Topic Author
beavetown
Posts: 1
Joined: Fri Jul 09, 2021 12:22 pm

Equity stake in business

Post by beavetown »

Hi All,

Several year lurker on the site which I’ve learned more from than any other place. I plan to put together an investment question in the suggested format in the near future.

Per the post subject I wanted to see if anyone could offer any information on an equity stake I have in a small business I worked for that was acquired by investors this year. The details I have as explained by the attorney in “simple terms” below.

- fully vested
- preferred interest
-preferred 8% distribution
- 5 year investment window (when the investors would be targeting to get their money out)
- 2% interest in what is left ( which if the company grows can be a considerable number)

I have not purchased this equity personally but rather was gifted it by the former owner as an incentive to stay with the company.

Can anyone clarify what the “2% interest in what is left”refers to?

Thanks for any information.
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