Admittedly, the buyout will be taxed less than your current income, with a possible equity kicker
when they flip the practice, which they hope to do three or four times
An equity kicker
takes many forms, but always allows for the financing provider to benefit from growth through the acquisition of a small equity share in the future.
InnoVen, for instance, gets an equity kicker
in the investee company.
For the angel and early-stage investor these return scenarios are highly attractive, providing repayment of principal that takes your risk off the table, monthly cash flows, a compelling return on investment and additional skin-in-the-game in the form of an equity kicker
(usually no more than 1%).
However, their investments are primarily in the form of subordinated debt with an equity kicker
(warrants to purchase stock) that allows them to participate in the value growth of the business.
The Fund targets to pay an attractive running cash yield and is structured to benefit from the potential asset appreciation on vessels through an equity kicker
Investment Bank, unit of Qatar Islamic Bank said that the fund targets to pay an attractive running cash yield and is structured to benefit from the potential asset appreciation on vessels through an equity kicker
oAttractive return for early investors with equity kicker
Many nonpublic and closely held companies issue debt with an equity kicker
, such as a warrant.
In California, however, lenders are allowed to compensate for this limitation by obtaining shared appreciation--an equity kicker
that gives the lender a portion of any price appreciation in the underlying real estate.
Of course, PCA's David Meredith aims to calculate what an executive's stock options will be worth five years from now--and then to gauge the current-year effect of the equity kicker
Therefore, with an equity kicker
, a strip financing arrangement can be implemented with each lender holding a smaller fraction of the equity than when debt is correctly priced.