Startup Law Glossary

-#-

1X
25102(f)
25102(o)
4 Years with a One Year Cliff
409A
83b Election

-A-

Acceleration Clause
Accelerated Vesting
Accredited Investor
Acquisition
Advisory Board
Alternative Minimum Tax
Amended and Restated Articles of Incorporation
Angel Financing
Angel Group
Angel Investor
Anti-Dilution
Articles of Incorporation
Authorized Shares
Automatic Conversion

-B-

Back-Up Certificate
Basket
Benchmark
Best Efforts Offering
Blanket Lien
Blue Sky Law
Board Consent
Board of Directors
Boilerplate
Bond
Book Value
Bootstrapping
Break-up Fee
Bridge Financing
Broad-based Weighted Average
Broker-Dealer
Bylaws
Burn Rate
Buy-Sell Agreement

-C-

C-Corporation
Call Right
Capital Call
Capital Commitment
Capital Gains Tax
Capitalization Table
Carried Interest
Carveout
Catch Up
Certificate of Incorporation
Certificate of Incumbency
Change of Control
Charter
Class F Common Stock
Clawback
Cliff
Closing
Co-Investment
Co-Sale
Collateral
Common Stock
Consideration
Control
Conversion Discount
Conversion Rights
Convertible Debt
Convertible Note
Convertible Stock
Corporate VC
Covenants
Cram Down Round
Creditor
Cross-default
Cumulative Dividend

-D-

Deal Flow
Debt Financing
Deck
Demand Registration Rights
Director
Distressed Debt
Distribution
Dividends
Domestic Corporation
Double Trigger Acceleration
Down Round
Drag Along Rights
Drawdown
Drive-By VC
Due Diligence

-E-

Early-Stage Financing
Earnout
EBITDA
Effective Pre-Money
EIN
Elevator Pitch
Engagement Letter
Equity
Equity Financing
Escrow
Evergreen Fund
Exit Event

-F-

Fairness Opinion
Financing Out Clause
Finder
Finder’s Fee
FINRA
First Time Fund
Flat Round
Follow-on Financing
Foreign Qualification
Form 2553
Form S-3
Form S-4
Founder
Founders Stock
Friends and Family Round
Full Ratchet
Fully-Diluted Basis
Fund
Fund of Funds
Funds Flow Memo

-G-

Go-Shop
General Partner
Grossing Up
Growth Stage

-H-

Haircut
Hedge Fund
Hockey Stick
Holding Period
Hurdle Rate

-I-

Incentive Stock Option (ISO)
Incorporation
Incubator
Indemnification
Indemnity
Independent Contractor
Information Rights
Initial Public Offering (IPO)
In-kind Distribution
Inside Round
Institutional Investor
Integration
Intellectual Property
Internal Rate of Return (IRR)
Inventions Assignment
Investment Advisor
Investor Rights Agreement
Issued Shares
Issuer

-J-

J Curve
Junior Debt
Junk Bond

-K-

Key Person Insurance

-L-

Later Stage Financing
Leveraged Buyout (LBO)
Lead Investor
Legal Opinion
Letter of Intent
Leverage
License
Lifestyle Company
Liquidation
Liquidation Event
Liquidation Preference
Liquidity Event
Limited Liability Company (LLC)
Limited Liability Partnership (LLP)
Limited Partners
Limited Partnership
Lock-up Period

-M-

Mergers and Acquisitions (M&A)
Management Fee
Management Rights
Material Adverse Change Clause
Merger
Milestones

-N-

Narrow-Based Weighted Average
NDA
No-Shop Clause
Non-Compete
Non-Cumulative Dividends
Non-Qualified Stock Option (NSO)
Non-Participating
Non-Solicitation

-O-

Officer
Optics
Option Pool
Ordinary Income Tax
Outstanding Shares
Overhang
Oversubscription

-P-

Par Value
Pari Passu
Participating Dividends
Participating Preferred Stock
Participation Rights
Pass Through Entity
Patent
Pay to Play
Payment in Kind (PIK)
Piggy-Back Rights
Placement Agent
Portfolio Company
Post-Money Valuation
Pre-Money Valuation
Pre-Money shares
Preemptive Rights
Preferred Return
Preferred Stock
Private Company
Private Equity
Private Offering
Private Placement
Private Placement Memorandum
Pro Rata
Promote
Prospectus
Public Company
Public Offering
Purchase Agreement
Put Right

-Q-

Qualified Financing
Quiet Period
Quorum

-R-

Ratchet
Recapitalization
Redemption Right
Redline
Regulation D
Registered Agent
Registrable Securities
Registration
Registration Rights
Reincorporation Merger
Representations and Warranties
Repurchase Option
Reserved Shares
Restricted Stock
Restricted Stock Purchase Agreement
Return on Investment
Reverse Break Up Fee
Reverse Vesting
Right of First Offer
Right of First Refusal
Rights Offering
Road Show
Rollup
Round
Royalties
Rule 144
Rule 145
Rule 501
Rule 502
Rule 503
Rule 504
Rule 505
Rule 506
Rule 701
Runway

-S-

S Corporation
Sarbanes-Oxley Act of 2002
Scalability
Scale Down
Scale Up
Search Fund
Secondary Buy-Out
Secondary Market
Secured Debt
Securities and Exchange Commission (SEC)
Securities Act of 1933
Securities Exchange Act of 1934
Security
Security Interest
Seed Capital
Seed Stage
Senior Debt
Series A Preferred Stock
Series A Round
Series AA Round
Series B Round
Shareholders Agreement
Single Trigger Acceleration
Sliding Fee Scale
Sole Proprietor
Spinoff
Startup
Stock Options
Stock Plan
Stock Purchase Agreement
Stock Split
Stockholders
Stockholders Consent
Strategic Investment
Subordinated Debt
Subsidiary
Supermajority Voting
Sweat Equity
Syndication

-T-

Tag Along Right
Takedown
Takeover
Taxable Event
Technology Transfer Agreement
Ten Bagger
Term Sheet
Trade Secret
Tranche

-U-

UCC
UCC Financing Statement
Underwater
Underwriter
Unsecured Debt

-V-

Valuation
Venture Capital
Venture Capital Financing
Venture Capital Limited Partnership
Venture-Backed Startup
Vested
Vesting
Vesting Schedule
Voting Rights

-W-

Warrant
Washout Round
Weighted Average
White Label