Markus Spiske / Unsplash

How I bought a business for $0

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Pratham Mittal over 4 years ago

why would the seller agree in the first place if revenue is already more and you are just paying a certain percentage back to him, what's the catch here

Justin Yang over 4 years ago

@mittal.pratham0910 Probably because if the company did implode, that you are on the hook for the remaining payments - the seller is effectively de-risked slightly (although still exposed to you defaulting) and also doesn't have to take operational/execution risk (i.e. they'd like to exit out of the business).