What happens to unused investment capital in a startup acquisition?
Simple answer is it’s subject to negotiation.
The cash is “purchased”, legally speaking, in an acquisition.
But it’s not uncommon for cash on hand to be paid out in addition to the nominal purchase price.
E.g., the parties handshake on $200m. And there’s still $20m in the bank. The acquirer may not want to pay $210m per se, let alone $220m. $200m may be the final line. But the acquirer may still be OK with $200m + return of cash on balance at close.
It’s form over substance.
But this stuff does matter.