The Internal Rate of Return (IRR) is a metric used to determine whether an investment’s expected rate of return warrants an investment. This is determined by comparing the expected rate of return against alternative investments’ expected returns.
An Independent Director is a member of the board of directors who is not associated with the company or its investors. Shareholders elect independent directors to provide an outside perspective.
An Incentive Unit Plan is used by an LLC to incentivize and compensate service providers to the company, similar to a Stock Option Plan in a corporation. An incentive unit gives the recipient a right to the future profits of […]
Incorporation is the act of incorporating a company through filing a required document with the secretary of state and paying an incorporation fee.
An Incubator is an entity designed to develop business ideas and/or new technology to the extent they become attractive to venture capitalists. An incubator typically provides physical space and some or all of the services needed for a business idea […]
An Incentive Stock Option (ISO) is a type of stock option typically granted to founders or key executives. ISOs receive long-term capital gains treatment if the shares are held for more than a year from the date the shareholder receives […]
Indemnity is a company’s agreement to pay another party’s losses under a contract regardless of whether the company caused the losses.
Indemnification is compensation for a harm the company may not have caused but had to pay for. Generally, a third party is harmed and a company must pay the third party for wrongful acts committed by another party. The party […]
An Indemnification Cap is the maximum amount that a company in a contract may have to pay to another party to the contract for the company breaching one or more representation and warranty provisions in the contract. These caps are […]