![]() The most frequent forms of antidilution provisions are full ratchet or weighted average.Īrticles of Incorporation: See certificate of incorporation.Īsset: things of value owned by a company are assets. ![]() Generally, such contractual provisions provide either price protection or maintenance of proportionate ownership protection. The typical angel-financed startup is in concept or product development phase.Īnti-Dilution: contractual provisions that protect an investor from certain consequences when a dilution event occurs, such as a subsequent sale by the company of additional equity securities. Usually angels invest less than $1 million per startup. This contrasts with a pure best efforts offering, in which no guaranteed minimum sale of securities must occur before the offering closes.Īngel: a wealthy individual that invests in companies in relatively early stages of development. Pension plans, college endowments and other relatively large institutional investors typically allocate a certain percentage of their investments to alternative assets with an objective to diversify their portfolios.Īll or None Offering: a securities offering that does not close unless all, but not less than all, of the securities offered are actually purchased. Accumulated dividends are reflected on a company’s balance sheet.Īdjusted Book Value: the Book Value ( or equity) of a company after adjusting the values of assets and liabilities to reflect estimated market values rather than depreciated tax values and removing non-operating assets and liabilities from the balance sheet.Īdjusted Earnings: the amount of discretionary earnings a business can produce, including adjustments for one-time or extraordinary expenses, excess owner compensation, and any other expenses that are not essential for the successful ongoing operation of the business.Īdjusted EBITDA: the combination of Adjusted Earnings + EBITDAĪfter-Tax Operating Income: see Net operating profit after taxes.Īlternative Asset Class: a class of investments that includes private equity, real estate, and oil and gas, but excludes publicly traded securities. Alternatively, dividends may be payable in full only in the event of a liquidity event (e.g., sale, IPO, or redemption) and accumulate until such time. Dividends frequently accumulate for a fixed period (e.g., two years) to permit a company to retain cash to grow the business. Often used to refer to an acquisition which is expected to increase earnings per share.Īccrual: an accounting procedure that records (recognizes) income or expense on a company’s financial statement at the time the income or liability event occurs (i.e., the exchange of goods or services) rather than when income is received or expenses are paid in cash.Īccumulated Dividend: a dividend that a company owes to an investor but that is not paid currently. a trust with assets in excess of $5 million, not formed to acquire the securities offered, whose purchases a sophisticated person makes.Īccretive: growing in size by external addition.a natural person with income exceeding $200,000 in each of the two most recent years or joint income with a spouse exceeding $300,000 for those years and a reasonable expectation of the same income level in the current year or.a natural person who has individual net worth, or joint net worth with the person’s spouse, that exceeds $1 million at the time of the purchase. ![]() a business in which all the equity owners are accredited investors.a director, executive officer, or general partner of the company selling the securities.a charitable organization, corporation, or partnership with assets exceeding $5 million.an employee benefit plan, within the meaning of the Employee Retirement Income Security Act, if a bank, insurance company, or registered investment adviser makes the investment decisions, or if the plan has total assets in excess of $5 million.a bank, insurance company, registered investment company, business development company, or small business investment company. ![]() For some of the exemptions, such as rules 505 and 506 of Regulation D, a company may sell its securities to what are known as “accredited investors.” The federal securities laws define the term accredited investor in Rule 501 of Regulation D as: The Act provides companies with a number of exemptions. “A” Round : a financing event whereby venture capitalists become involved in a fast growth company that was previously financed by founders and/or angels.Īccredited Investor : under the Securities Act of 1933, a company that offers or sells its securities must register the securities with the SEC or find an exemption from the registration requirements.
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