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Unit Purchase Agreement - Explained

The Unit Purchase Agreement (UPA) is the mechanism by which Union Kitchen is able to buy units in your company to become equity partners. Equity represents the percentage value that would be returned to a company’s shareholder if they are bought out or the company is acquired. The equity exchange between your company and Union Kitchen is not related to your company’s profits or units of product, but rather the value of your company. We take our work and yours very seriously. In exchange for our equity share, we pour our resources, network, Ecosystem, and expertise into this partnership to support your success.

The Unit Purchase Agreement also outlines the parameters around the unit price, or how much each unit costs. Upon execution of the agreement, the valuation of your company is set at $1M. As your company grows and becomes more successful, the company valuation will increase. Future valuations can support fundraising efforts and buy-outs, among other things. If the company is interested in buying out an investor, like Union Kitchen, the company can present a buy-out offer to the board for a vote. The valuation would be determined at that time, typically by a third party. The Unit Purchase Agreement provides the opportunity for Union Kitchen to invest in subsequent investment rounds, however, Union Kitchen has no intention of becoming a majority shareholder so Union Kitchen would not buy a company owner out of their shares.