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Holdback Escrow

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Home Startup Terms Glossary Holdback Escrow

What is a Holdback Escrow?

Holdback escrow is an agreement that outlines how certain funds will be set aside to cover the cost of fees associated with a breach of contract by the seller in the deal. Better known as escrow holdback, this amount is usually a percentage of the total purchase price that will be held to be security for the buyer.

Holdback Escrow Examples

Example of a situation in which an escrow holdback might be needed:

  • Example 1. A buyer is interested in buying a startup but negotiations have been contentious to date. The buyer may set aside money in case the seller breaches the purchase agreement or terms of the deal.

Here’s a web page about holdback escrows.

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