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Typically, though not always, the businesses that are torn down the hardest by the sharks have poor fundamentals and little traction.

Five percent equity taken from these businesses is unlikely to ever amount to anything of significant value, although naturally the entrepreneurs presenting their businesses may feel otherwise.

And if your business is in so poor of a state that it gets mocked and humiliated, there seems to be little downside to just re-incorporating if you truly believe in your idea. In this case, wouldn't ABC get nothing?

I understand that in the real world, legal ramifications and damage to one's reputation mean this rarely happens -- but is ABC really going to make a stink?

I would imagine re-incorporating just to screw ABC out of an equity or royalty agreement would be a pretty easy way to end up in a courtroom explaining how what you didn't wasn't some sort of fraud.

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