MOMO'S BREAKOUT BOARD

[Let's Roll]

$DATI When angel investors get an equity kicker in a public company that has no relation to the value of the underlying investment, they have access to part of their investment capital within 12 months without touching their original investment in the startup. Additionally, they don't feel any remorse if they have to sell the equity kicker because it doesn't affect their underlying investment. This equity kicker equates to an insurance policy on their investment that has the potential to grow unencumbered. An example of this type of equity kicker is analogous to a teenager getting car insurance on his own versus getting put on to their parents' policy. The teenager who got the car insurance on his or her own would likely need to work every waking hour just to keep the car insurance in place and would have little time for homework, which is akin to project development. The teenager on the parents' insurance policy would have to work a little to make the insurance payment but would still be able to devote a lot more time to his or her studies or in the case of the startup, the actual project development. It's easy to see in this example that the startup with the equity kicker is more likely to succeed because they aren't struggling for capital and if they did have a misstep or a set back the angel investor got a return on some of the money and might be more apt to put that back into the company if they were close to a milestone. The equity kicker is a win for the startup, a win for DATI, and a win for the angel investor.

https://www.streetwisereports.com/article/2018/02/15/breaking-the-mold-of-financing-startups-whos-funding-the-next-big-thing.html