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Liquidation Preference
A liquidation preference is one of the primary economic terms of a venture finance investment in a private company. The term describes how various investors' claims on dividends or on other distributions are queued and covered. Liquidation preference establishes that certain investors receive their investment money back first before other company owners in the event the company is sold, has a public offering, pays dividends, or has another liquidation (payout) event. Types Liquidation preferences can be partial (they apply to less than 100% of investment funds), full (100%), or at a multiple of original investment funds. Further, interest or guaranteed dividends may or may not be added to the preference amount over time. Occasionally the multiple shifts over time as well. Another distinction is that preferences may be "participating", meaning investors receive their preference first and are then entitled to a share of any remaining funds based on their ownership, or they may be "non ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Venture Finance
Venture capital financing is a type of funding by venture capital. It is private equity capital that can be provided at various stages or funding rounds. Common funding rounds include early-stage seed funding in high-potential, growth companies (startup companies) and growth funding (also referred to as series A). Funding is provided in the interest of generating a return on investment or ROI through an eventual exit through a share sale to an investment body, another trading company or to the general public via an Initial public offering (IPO). Venture Capital can be made in four methods: 1) Equity Financing; 2) Conditional Loan; 3) Income Note; and 4) Participating Debenture. Overview Starting a new venture or launching a new product in the market requires funding. There are several categories of financing possibilities depending on the scope of a venture. Smaller ventures sometimes rely on friends and family funding, loans, or crowd funding. For more ambitious projects, some ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Public Offering
A public offering is the offering of securities of a company or a similar corporation to the public. Generally, the securities are to be listed on a stock exchange. In most jurisdictions, a public offering requires the issuing company to publish a prospectus detailing the terms and rights attached to the offered security, as well as information on the company itself and its finances. Many other regulatory requirements surround any public offering and they vary according to jurisdiction. The services of an underwriter are often used to conduct a public offering. Stock offering Initial public offering (IPO) is one type of public offering. Not all public offerings are IPOs. An IPO occurs only when a company offers its shares (not other securities) for the first time for public ownership and trading, an act making it a public company. However, public offerings are also made by already-listed companies. The company issues additional securities to the public, adding to those curren ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Preferred Stock
Preferred stock (also called preferred shares, preference shares, or simply preferreds) is a component of share capital that may have any combination of features not possessed by common stock, including properties of both an equity and a debt instrument, and is generally considered a hybrid instrument. Preferred stocks are senior (i.e., higher ranking) to common stock but subordinate to bonds in terms of claim (or rights to their share of the assets of the company, given that such assets are payable to the returnee stock bond) and may have priority over common stock (ordinary shares) in the payment of dividends and upon liquidation. Terms of the preferred stock are described in the issuing company's articles of association or articles of incorporation. Like bonds, preferred stocks are rated by major credit rating agencies. Their ratings are generally lower than those of bonds, because preferred dividends do not carry the same guarantees as interest payments from bonds, and becaus ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
VentureBeat
''VentureBeat'' is an American technology website headquartered in San Francisco, California. It publishes news, analysis, long-form features, interviews, and videos. History The ''VentureBeat'' company was founded in 2006 by Matt Marshall, an ex-correspondent for ''The Mercury News''. In March 2009, ''VentureBeat'' signed a partnership agreement with IDG to produce DEMO Conference, a conference for startups to announce their launches and raise funding from venture capitalists and angel investors. In 2012, the partnership with IDG ended. In 2014 and 2015, the company raised outside investor funding from Silicon Valley venture capitalist firms including CrossLink Capital, Walden Venture Capital, Rally Ventures, Formation 8, and Lightbank. Editorial The ''VentureBeat'' website comprises a series of distinct news "Beats": Big data, Business (general news), Cloud, Deals, Dev, Enterprise, Entrepreneur, Media, Mobile, Marketing, Security, Small Biz, and Social. In addition, the ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Distribution Waterfall
In private equity investing, distribution waterfall is a method by which the capital gained by the fund is allocated between the limited partners (LPs) and the general partner (GP). Overview In a private equity fund, the general partner manages the committed capital of the limited partners. The GP usually commits some amount to the fund (the "GP co-investment"), usually 1 to 2% of the commitment. When distributing the capital back to the investor, hopefully with an added value, the general partner will allocate this amount based on a waterfall structure previously agreed in the Limited Partnership Agreement. A waterfall structure can be pictured as a set of buckets or phases. Each bucket contains its own allocation method. When the bucket is full, the capital flows into the next bucket. The first buckets are usually entirely allocated to the LPs, while buckets further away from the source are more advantageous to the GP. This structure is designed to encourage the general partner t ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Option Pool Shuffle
Option pool shuffle relates to the allocation of shares to a venture capital (VC) investor at the point of investment, when also creating an Employee Share Option Pool at the same time. There are two different approaches to determine the number of shares to allocate to each investor, the VC Friendly Approach and the Founder Friendly Approach. The VC Friendly approach The VC Friendly approach, which may also be called a pre-money pool, gives the VC a greater share of the company. The Share Options are allocated first, and then the VC is allocated its shares. The impact is the VC share allocation dilutes the Share Option Pool and the VC ends up with a greater percentage of the company The Founder Friendly approach The Founder Friendly approach, which may also be called a post-money pool, gives the VC a smaller share of the company. The VC are allocated their shares first. The impact is that the VC is diluted by the new Share Option Pool and the VC ends up with a smaller percentag ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Dividends
A dividend is a distribution of profits by a corporation to its shareholders. When a corporation earns a profit or surplus, it is able to pay a portion of the profit as a dividend to shareholders. Any amount not distributed is taken to be re-invested in the business (called retained earnings). The current year profit as well as the retained earnings of previous years are available for distribution; a corporation is usually prohibited from paying a dividend out of its capital. Distribution to shareholders may be in cash (usually a deposit into a bank account) or, if the corporation has a dividend reinvestment plan, the amount can be paid by the issue of further shares or by share repurchase. In some cases, the distribution may be of assets. The dividend received by a shareholder is income of the shareholder and may be subject to income tax (see dividend tax). The tax treatment of this income varies considerably between jurisdictions. The corporation does not receive a tax deduct ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
