Venture Deals, 4th Edition

Glossary

accelerator

A program intended to mentor founders 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 his shares if something adverse happens to the company.

advisers

People who advise startup companies. Normally, these people are paid some sort of compensation for their efforts.

affirmative covenants

Action that the company promises to take during the term of the financing contract in a financing.

agency costs

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

alpha

The earliest of early prototypes of a product. This is before the beta, which is still a prototype, but with a lot more polish.

amortization terms

Terms that debt lenders use to better align the debt with the capital strategy of the company.

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 her own money in the company.

antidilution

A term that provides price protection for ...