Primary Shares are a company’s shares sold by the company rather than by shareholders.
The Price Per Share is the price for a single share of stock. The price per share can be determined by dividing the pre-money valuation by the number of outstanding shares. $1.5 million pre-money divided by 10,000,000 shares is $0.15 […]
A Price Cap, also known as a Conversion Cap or Valuation Cap, is the greatest valuation used to convert a convertible note into equity in the company.
Preferred Stock is a type of equity security that is preferred or has preferences over the common stock, largely in terms of dividend payments and fixed payments upon a corporation’s liquidation.
Preference is having a priority over other shareholders, usually regarding distributions in the form of dividends and proceeds from the sale of a company.
A Portfolio Company is a company that is part of a venture capital or private equity fund’s investment portfolio.
A Post-Money Valuation is the valuation of a startup immediately after consummation of an investment round. This is calculated as pre-money valuation + cash invested = post-money valuation.
Preemptive Rights are given to shareholders, and before the company can issue additional shares, the company must give the shareholder the option to purchase the amount of newly issued shares that would maintain the shareholder’s percentage of ownership.
The Preferred Return is the amount of return the preferred shareholders will receive on the investment. If the preferred return is not met, there is said to be an overhang, and no other shareholders will receive a return.
Pre-Money Shares are the amount of fully-diluted outstanding shares before a company raises a capital round. Contrarily, post-money shares are the sum of the outstanding shares issued to the new investors and the pre-money shares.