Redemption Rights
定义
Redemption rights let preferred shareholders force the company to buy back their shares, usually for the original purchase price plus accrued dividends, after a set number of years if the company has not had a liquidity event.
它在融资中如何出现
Investors ask for redemption rights as downside protection against a company that stalls out without exiting or raising again; founders push back hard because a forced buyback can strain a company with no cash to spare.
常见问题
Are redemption rights common in US venture deals?
They are less common at early stages and more likely to appear in later, larger rounds or in markets outside the US where investors have less leverage over an eventual exit.
What happens if a company cannot afford to honor redemption rights?
Most redemption clauses are structured so the company only pays what it can from legally available funds, spreading the obligation over time rather than forcing insolvency.