We got used to the idea that most entrepreneurs set up companies with the aim of solving a problem and making profit while at it. Business growth and sustainability are some of the buzzwords when such discussions come up. However, in recent times, the business world has come to accept a new model, the motive being to set up a business with a predetermined exit point for the founder, who monetizes his/her equity once the triggers are activated.

One of the basic things this model does, is to include entrepreneurs/ founders in the conversations around exit strategies. Such conversations were usually within the confines of the likes of Venture Capitalists, Private Equity and other kinds of investors. However, with the advent of this new business model, it has become an all-inclusive conversation, with founders at the driving seat. We are not out to test the viability of this model, therefore, we will not delve much into its pros and cons. We also won’t weigh in on how some have used it to lay the foundation for globally impactful organizations, while others have gone ahead to abuse it. We will focus on highlighting the interplay between valuation (finance) and vehicles (legal) that are usually seen in this model.