Crunchbase News: When Strategic Warrants Become Strategic Roadblocks

In this article we discuss how a common clause in strategic investments warrants with restrictive notice periods, can unintentionally become a roadblock to startup growth and exits. The article follows a real case of a SaaS company that accepted a strategic investment with a 90 day notice requirement before pursuing any fundraising or M&A. While this clause was meant to protect the investor it significantly limited the startup's flexibility and discouraged other investors and acquirers from moving forward. The article highlights key lessons for founders including the importance of avoiding long notice periods that restrict agility balancing investor rights with future strategic options and ensuring that any protective terms are aligned with the company’s long term goals. What may seem like a small contractual detail can if not carefully negotiated stand in the way of a successful exit.

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