Limited Partners (VC Firm)

Limited Partners are the investors in a VC fund.


Light Preferred

Light Preferred is a round of funding that is smaller than a Series A round and gives investors preferred stock that receives less favorable treatment than preferred stock typically receives in Series A rounds.


Lean Startup

A Lean Startup seeks to prove its business concept as quickly and inexpensively as possible by making a Minimum Viable Product (MVP) the top priority. Popularized by Eric Ries.


Launch

A Launch is when a business kicks off, often by taking its app, technology, or site live. A Launch is a great time for a startup to draw attention to its product, attract talent to its team, and introduce itself […]


Liquidation Event

A Liquidation Event is typically defined as a sale of substantially all of the assets of the company (not in a bankruptcy scenario). In investment agreements, liquidation events often trigger investors’ rights regarding distributions, conversions, or preferences.


Liquidation Preference

Liquidation Preference specifies which investors get paid first and how much they get paid in the event of a liquidation event, such as the sale of a company. Liquidation preference helps protect investors by making sure they get their initial […]


Liquidation Preference Overhang

Liquidation Preference Overhang is the extra liquidation preference sometimes inadvertently granted to convertible note holders upon conversion. It arises when a noteholder conversion price is lower than the price per share in the next round, but the noteholder gets a […]


Lock-up Period

A Lock-up Period is a mutually agreed upon period of time following an IPO that founders, key employees, and investors are restricted from selling their shares in the company.


Liquidation

A Liquidation is when a company is forced to sell its assets to pay off its liabilities because the company is going through a voluntary or involuntary bankruptcy proceeding or is winding up its business operations.


Lapsed Option

A Lapsed Option is an option that can no longer be exercised because some necessary condition has expired. Often stock options are granted but have a finite time period within which the options must be exercised. Once the finite period […]