Escape VelocityYou need to decide when you're in and when you're out of any contract. Here's how to do it.
ByMarc Diener•
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If your deal has any kind of timeline, having an"escape" clause can be a lifesaver. It can be a drop-deaddate after which all bets are off. Or, you can erect a"milestone." For instance, it can be something like this:"If gross revenues do not equal at least X dollars within 18months, we stop funding."
With a "step" deal, you hedge your bets by investingtime and/or money in stages. Here's an example: A venturecapital firm will fund in phases, from seed capital at the outsetto bridge financing before the IPO. At each prenegotiated juncture,the firm reserves the right to pull the plug.
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