Smart Money is investment dollars from professional investors – i.e. venture funds or experienced angel investors.
A Stock Purchase Agreement is a legally binding contract whereby a purchaser (oftentimes an investor) agrees to purchase shares of a company in exchange for consideration. The consideration is almost always cash, but it could be services or a promissory […]
A Stock Split is when a company divides its shares into additional shares. The total value of the shares remains the same, but each shareholder will own two or three times more shares.
A Stockholder is the same thing as a “shareholder,” or the owner of stock (a.k.a shares) of a corporation. Stockholders can be individuals or entities.
Stockholders’ Consent is when some corporate actions such as the sale of the company require the stockholders to consent to the company taking such action.
Subordinated Debt is debt that ranks lower in priority than another particular debt if a company falls into bankruptcy or has to liquidate. You may also see it referred to as “junior debt,” a “junior security,” or a “subordinated loan.”
A Strategic Investor is generally a company who makes an investment in a startup primarily for a strategic business reason, in addition to the potential for financial gain.
A Super Majority is a designated percentage (usually 67%) required to take certain actions – usually major decisions like selling the company.
The Strike Price is a fixed price that option holders must pay when exercising their stock options.
Sweat Equity is the ownership interest, or increase in value, that is the direct result of hard work by the startup owner(s). For the startups out there – please do not plan to be paid, or repaid, for your sweat […]