SAN FRANCISCO (Reuters) – a couple of eHarmony Inc’s major backers stand to obtain higher control around online-dating team in early November when redemption liberties from its final funding round activate — a silly developing when you look at the capital raising companies.
The legal rights need to be considered after November 5 for tech Crossover projects and Sequoia investment, which spent when eHarmony increased $110 million in 2004.
The agencies need the authority to need eHarmony purchase right back their unique favored percentage in four quarterly installments, relating to eHarmony’s certificate of incorporation.
The organization will have to shell out $8.0158 for every single favored display are used, matching the asking price of the original $110 million financial investment, or a “fair market price” consented by eHarmony’s board of directors and holders of many on the inventory are bought back once again — whichever was better.
When the two edges can’t recognize, they need to hire a completely independent appraiser to determine a worth when it comes down to securities in 20 era, the certificate says.
“It’s extremely rare that these redemption liberties are now actually exercised,” stated Curtis Mo, a Silicon Valley partner at firm DLA Piper. “More frequently, if an organization or management isn’t doing, investors may use growing redemption rights as leverage to force some actions like a sale of this providers.”