Glossary

how much a company is worth (or what people think it’s worth).

so a VC isn’t just about infusing a company with cash. They also like to help out startups with advice, technology, connections, and more. These non-financial services are also called add-ons.

An investment in a startup business that is perceived to have excellent growth prospects but does not have access to capital markets. Type of financing sought by early-stage companies seeking to grow rapidly.

investors who have collected a fund of money for investments and spread it around to burgeoning companies.

the lag period between when someone is awarded a stock option and when they can actually exercise it.

Timetables for stock grants and options mandating that entrepreneurs earn (vest) their equity stakes over a number of years, rather than upon conversion of the stock options. This guarantees to investors and the market that the entrepreneurs will stick around, rather than converting and cashing in their shares.

The year in which the venture firm began making investments. Often, those funds with "vintage years" at the top of the market will have lower than average returns because portfolio company valuations were high, e.g. an Internet Fund started in vintage year 1998.

is the right of a company to repurchase some or all of an investors' outstanding shares at a stated price at a given time in the future. The purchase price is usually the Issue Price, increased by Cumulative Dividends.

The common stockholders' right to vote their stock in the affairs of the company. Preferred stock usually has the right to vote when preferred dividends are in default for a specified amount of time. The right to vote may be delegated by the stockholder to another person.

the ability to vote for or against company actions.