Definition
A buyout mechanism where one co-founder can offer to buy out another at a specific price, and the recipient must either sell at that price or buy the offerer's shares at the same price. The nuclear option for irreconcilable founder disputes.
Example Usage
When the co-founders couldn't agree on strategy, Sarah triggered the shotgun clause, forcing Jake to either sell for $500K or buy her out at the same valuation.
Origin
Borrowed from real estate partnership agreements, named after the shotgun start in racing
Fun Fact
Shotgun clauses rarely get triggered because the threat of mutual financial destruction usually forces founders to negotiate like adults.
Source: Corporate partnership law and startup legal structures
Related Terms
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See “shotgun clause” in Corporate Speak, Gen-Z Slang, Pirate Speak, and more.
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