Operating Partner (VC Firm)

An Operating Partner is a position at a VC firm that is normally under managing director, but above principal.


One Deal at a Time

A fund where deals are presented one at a time to the investors and the investors can choose to participate on a deal-by-deal basis. Contrast this with Blind Pool.


Outstanding Shares

Outstanding Shares refers to the number of shares that a company has issued to shareholders (including founders, investors, advisors, and option holders).


Overhang

Overhang is when preferred stock shareholders’ liquidation preference is greater than the amount of proceeds the company receives for liquidation. If there is overhang, none of the proceeds will be disbursed to the common shareholders.


Oversubscription

Oversubscription occurs in any offering of securities when the demand for those securities exceeds the maximum size of the offering. When an offering becomes oversubscribed, investors can either elect to accept an allocation that is a reduced percentage of their […]


Ordinary Income Tax

Ordinary Income Tax is a tax on income at rates published by the IRS. Ordinary income tax is generally significantly higher than capital gains tax.


Offering Documents

Offering Documents are the documents that are involved with the sale of a startup’s securities (see Private Placement). These documents include various agreements specifying the rights of all parties involved, the risks associated with the sale, an agreement for the […]


Option Plan

An Option Plan is a plan created by a company to issue stock options to its employees and service providers.


Option Pool

An Option Pool is a group of shares reserved by the company for long-term compensation to management and employees.


Offering Memorandum

An Offering Memorandum is a legal document drafted by startups to provide details of an investment round to potential investors. See Private Placement Memorandum (PPM).