Putative Issuance

Putative Issuance refers to the issuance of any class or series of shares of a corporation that was purportedly created or issued as a result of a defective corporate action. A Putative Issuance most commonly occurs when a corporation issues […]


Profit means gross revenue minus expenses.

Participating Preferred Stock

Participating Preferred Stock is preferred stock that receives a liquidation preference, or a priority right upon the company’s liquidation (exit).

Par Value

Par Value is the the initial value of a single share, and the lowest sales price a startup can receive for its shares. Typically, when a company first organizes, the shares have no or a nominal par value such as […]

Purchase Price

Purchase Price refers to cash and other property/assets paid in a transaction.

Public Offering

A Public Offering is a company selling its equity to the public. Public offerings in the U.S. must be registered with and approved by the SEC.

Public Company

A Public Company is a corporation whose securities are traded on a public exchange. These securities must be registered with the SEC.


Pro-Rata means proportional. For instance, if investors have a pro-rata Right of First Offer, then that means each investor will have a right to purchase new securities in proportion to their ownership. I.e. if an investor owns 5% of a […]

Promissory Note

A Promissory Note is a debt instrument whereby a borrower promises to pay a lender in accordance with terms defined in the note.

Profits Interest Plan

A Profit Interest Plan (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 […]