Lexicon for Entreprenuers
Emerging Companies
An interactive dictionary of industry specific phrases, jargon, and nomenclature.
The Lexicon for Entrepreneurs introduces entrepreneurs to terms and concepts used in their transactions, acting as an easily accessible resource for business owners and the like when they come across unfamiliar phrases or terminology. These terms may change as applicable law and custom matures.
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Accelerator
A program intended to mentor founders and accelerate the growth and success of a startup company
Accredited Investor
A person who is permitted to invest in startups and other high-risk private company securities based on the net worth and income level of the potential investor.
Acquisition
A transaction between two companies where one is buying the other.
Adverse Change Redemption
A type of redemption right whereby a shareholder gets the right to redeem his shares if something adverse happens to the company.
Advisers
People who advise startup companies. Normally, these people are paid some sort of compensation for their efforts.
Affirmative Covenants
Action that the company promises to take during the term of the financing contract in a financing.
Agency costs
The costs associated in an agency / principal relationship that the principal incurs either directly or indirectly.
Alpha
The earliest prototype of a product.
Amendment and Waiver
Outlines the process for amending or waiving terms in the certificate of incorporation.
Amortization Terms
Terms that debt enders use to better align the debt with the capital strategy of the company.
Analyst
A junior staff member at a venture capital firm, often a recent college graduate.
Angel Investor
An individual who provides early-stage funding to startups in exchange for equity ownership.
Anti-Dilution Provision
A mechanism that adjusts the conversion price of convertible securities to protect investors from dilution in the event of a down-round financing.
Arbitration
A method of dispute resolution where parties agree to have their conflicts resolved by a neutral third party (an arbitrator) instead of going to court.
Articles of Incorporation
A legal document filed with the state to formally create a corporation. It outlines the company's purpose, structure, and initial shareholders.
As-Converted Basis
Looking at the equity base of the company assuming that all preferred stock has been converted to common stock.
Assignment
The right of a preferred shareholder to transfer its shares to an affiliated entity without company consent.
Associate
A venture capital employee involved in deal analysis and management.
At-Will Employee
An employee who can be terminated by a company for any reason.
Searching
The first step in buying a small business, finding companies that are for sale at a reasonable price and that match the characteristics you want.