Wikipedia

Golden umbrella

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A golden umbrella is a clause in an entrepreneur's contract with their company, typically the CEO or COO, that guarantees a certain payout for the risk they bear in starting the company.[1]

The down-side of a golden umbrella is that angel investors typically do not know the terms of a golden umbrella, thus a CEO may start a company, grow the company, seek first-round and second-round venture capital, and then exit the company with a large pay-out just before the company's market growth takes a downturn due to poor business planning. Hence cheating out on the investors or sponsors

See also

References

  1. ^ http://www.reachinformation.com/define/Golden%20umbrella.aspx Retrieved on April 3, 2014
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