Participation Rights, in regard to preferred stock, are when a preferred stockholder receives its liquidation preference and additionally receives disbursements in equal proportion to its ownership percentage along with the rest of the shareholders.
A Placement Agent is an individual or firm that assists venture capital and private equity fund managers in finding institutional investors.
Piggy-Back Rights are an investor’s rights to be included in the company’s registration of securities with the SEC. The registration of securities is often initiated before a company undergoes an IPO.
A Perpetual Warrant is a security that gives the warrant holder the right, but not the obligation, to buy or sell a security at a certain price. Unlike a warrant, however, a perpetual warrant has no expiration date and could […]
Pay-to-Play provisions require investors to invest in a future capital round or “pay” the consequences of losing some rights ranging from losing a liquidation preference to losing voting rights.
A Pass Through Entity passes all income and losses it receives to the company’s owners or investors to be taxed at an individual level. Some examples of pass through entities are partnerships, sole proprietorships, limited liability partnerships, and limited liability […]
A Partnership is created, without filing anything with the state, when two or more individuals go into business for profit. Partners are personally liable for all of the partnership’s debts and liabilities, but the partners receive the benefit of pass […]
Participating Preferred Stock is preferred stock that receives a liquidation preference, or a priority right upon the company’s liquidation (exit).
Pari Passu is a Latin phrase meaning “Equal Footing.” Pari Passu refers to the equal treatment of multiple parties without any display of preference.
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 […]