Investment in high-tech
Glossary *:
Angel Angel)) - an individual investor wealthy companies and private enterprises, angels are investing in the private sector, and the institutional sources of funds or other private persons.
Protection against dilution (Anti dilution Provisions) - when the company issues new shares at a cheaper price than the price it paid previous shareholder, will a defense mechanism, to shareholders who bought at a higher price, by reducing the conversion price of the shares.
Full Ratchets- Calculation Method extreme protection against dilution. Of the holdings of the shareholders present calculated as if the original investment invested in the new stock price, ie relative share has increased.
Weighted Average- Visitors Calculation Method for protection against dilution. Of the holdings of the shareholders present is calculated according to the new share price, which is a weighted average between the current price original price. There are different formulas for calculating the weighted mean it.
Legal "blue sky" (Blue Sky Laws) - laws enacted in many states in the US and which require the sellers IPOs record initial public offer and provide financial information about their company.
Bridging Loan (Bridge Loan) - A loan company aims to get cash to bridge the period until the company will conduct a round of investment, mostly converted into shares of the Company during the investment round.
Joining obligation Drag along / Bring along)) - in the case of an offer to purchase the Company's shares, when there is a certain percentage who wants to make the purchase and purchasers set as a condition of purchase of all shares in the company, then the other shareholders are obligated to join the sale under the same conditions.
Capital gains (Capital Gain) - the difference between the purchase price of an asset and its sale price (only when the difference is a positive amount).
Capital Call - limited partners of venture capital undertake advance the amounts to be invested in the fund and the fund called money as needed.
Residual income (Carried Interest) - In the context of venture capital funds, the profits, usually 20%, the fund allocated to the general partners.
Closing (Closing) - it is customary to closing date of the transaction documents, which the company to meet all its liabilities and as a result you will get the investment at that time (usually a few weeks after the signing (Signing) investment documents).
Capital commitment (Committed Capital) - capital investment commitment in the fund. Venture capital investment are not acceptable undertaking paid at - once, but at the request of charge from the fund manager.
Right to Join (co-Sale / Tag Alone) - the right to join the sale of shares by a shareholder, on the basis of the relative holdings.
Demand - the right to require the Company's shares for trading, although the company did not plan to go out in the prospectus (see (Registration Right.
-Defaulting Party as a limited partner in the fund did not respond to the requirements of the Capital Call it will be deemed in violation and will be punished in accordance with the documents of the Fund.
Dilution (Dilution) - reduction of the holdings of the company's owners and existing shareholders, as a result of the entry of new investors to the company.
Due diligence (Due Diligence) - Review of the business plan, and evaluation of the management team and its legal, technical and accounting of the company before investing in it.
Exercise price (Exercise Price) - the price at which an option may be exercised.
Exercise (Exit) - the way an investor closes a position, for the most part through its conversion into cash. In the context of
Venture capital investment - investment is realized by the issuing company or its sale.
General partner (General Partner) - partner in a limited partnership (limited partnership) is responsible for the Fund's current performance. The general partners is responsible for any liabilities the fund.
IPO (Initial Public Offering - IPO) - Sale of shares in the company not yet traded on the stock exchange.
Institutional investor (Institutional Investor) - An entity that coordinates investment funds of individuals and organizations other independent states of the investment policy of funds. Institutional investor holding large sums for investment, such as investment companies, mutual funds, brokerage firms, insurance companies, pension funds, investment banks and funds dedication.
IP (Intellectual Property) - an intangible asset that contains human knowledge and ideas.
Right of priority in liquidation (Liquidation Preference) - priority among the shareholders upon liquidation of the company.
Blocking (lock-up) - a clause in the underwriting of an investment bank and existing shareholders forbidding them to sell their shares at the time of issue and for a while afterwards.
Management fees (Management Fee) - payment made by a venture capital fund to the general partner of venture capital fund.
Over-allotments (Over Allotment) - The right of shareholders to purchase beyond their relative share in the expense of the shareholders who exercised in exercise of preemptive right.
-Pay To Play who has not exercised the preemptive right round Specifically lose it the next rounds.
The value of the money (post-money valuation) - the value of the company after the investment (that is the total investment and the value of the company before the money). Can be calculated by multiplying the price paid for a share in a financing round total amount of shares after recruitment.
-Piggy- Back the right to join the register when listing shares.
Preemptive right (Preemptive Right) - the right of the current shareholders to maintain their ownership percentage of the company by buying shares in proportion to the size of their holdings in the event of the company's flotation other investors.
Share premiere (Preferred Stock) - stock that priority ordinary share for distributing dividends or payments in the event of bankruptcy of the company. Premiere shareholders may benefit also other rights, such as rights of veto and protection against dilution.
Pre-money valuation (pre-money valuation) - the value of the company before it was invested in money calculated by multiplying the share price paid for a financing round total amount of shares before the draft.
Private placement (Private Placement) - sales of securities not listed for trading to institutional investors or individuals.
Regulation D (Regulation D) - Regulation of the Securities and Exchange Commission regulates private placements.
Registration Agreement (Registration Right) - as opposed to the State of Israel which recorded a trading company with all of its shares can be traded, the United States has to register any particular stock trading to trade in. Registration Agreement is intended to grant privileges to shareholders and to require the Company to register their shares rather .
Right of First Refusal (Right of First Refusal) - Contract Conditions that gives a shareholder the right to purchase shares of other shareholders before selling them to outside investors.
Article 144 (Rule 144) - Regulation of the Securities and Exchange Commission permits stock trading, even though they were listed, the fulfillment of certain conditions (such as the scope of certain holdings).
Principles document (term sheet) - a document that outlines the principles of the rules of the purchase agreement or investment agreement. For the most part, the parties agreed upon before the official contractual language will be discussed and is not binding.
Maturation (vesting) - options granted of having the shares over time, as long as it works for a company. If you stop working will stop ripening and the employee would receive only his proportionate share of a range of options originally granted.
-Reverse Vesting mechanism for a similar purpose ripening mechanism, but in reverse order. Ie, all the shares / options granted to employees of the Company on the first day and the right to purchase the shares back if he leaves. As time passes, the company can buy back a little.
Certificate options (Warrant) - certificate usually issued with bonds or preferred-share. Permit authorizes the holder to buy a certain amount of securities at a specified price, usually higher than the current market price, for a long time - from a few years to an indefinite period.
