Venture Deals, 3rd Edition

Glossary

accelerator

A program intended to mentor and accelerate the growth and success of a startup company.

accredited investor

As defined by federal securities laws, 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 her shares if something adverse happens to the company.

adviser

Someone who advises startup companies. This person is often paid some sort of compensation for his efforts.

agency costs

The costs associated in an agency/principal relationship that the principal incurs either directly or indirectly.

analyst

A very junior person at a venture capital firm, often a recent college graduate.

angel investor

An individual who provides capital to a startup company. This person is usually independently wealthy and invests his own money in the company.

antidilution

A term that provides price protection for investors. This is accomplished by effectively repricing an investor’s shares to a lower price per share in the event that the company completes a financing at a lower valuation than a previous financing round.

as-converted basis

Looking at the equity base of the company assuming that all preferred stock has been converted to common.

associate

A person at a venture capital firm who is ...