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Saksham

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Bebyondย โ€ขย 8m

Understanding the Lock-in Period The lock-in period is a key feature in investment agreements, especially in private equity and venture capital deals. Itโ€™s a designated timeframe during which shareholders, typically founders or early investors, are restricted from selling or transferring their shares. Why does it matter? The lock-in period provides stability. It ensures that key stakeholders maintain skin in the game, aligning their long-term interests with the companyโ€™s growth. For investors, this is criticalโ€”it prevents founders from cashing out too early, potentially leaving the business vulnerable. However, it's not just about limitations. Once the lock-in period expires, shareholders gain liquidity and flexibility to exit or reallocate their investments. Itโ€™s a balancing act between protecting the company's future and offering eventual freedom for investors. Always review the terms carefully, as lock-in periods can vary significantly based on the deal structure.

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