option to purchase
Hi guys,
We are looking at making an investment in a promising company which could become quite strategic for us in the future.
At the moment we are looking at making an equity investment and we could consider an option to purchase.
Where could I get some information on how to price & structure the option part of the deal?
On the optionality: it would also be super helpful to learn about the typical clauses that need to be included and the tax implications
Thanks and merry Xmas!
You're basically looking to structure an off-market call option. Plenty of resources out there when it comes to call/put option pricing. Fire up the ol' Black Scholes machine.
At the end of the day, its a negotiation and the price you pay will be whatever they are willing to accept.
Thanks for your comment! but what about the contractual terms? There must be must have, nice to have etc...
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