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# Counsel for Emerging Companies and Startups

VW is a boutique full service law firm in Dallas and Austin that focuses our practice in the areas of M&A, Private Equity, Fund Representation, and Venture Transactions.

## Posts

- [News & Events](https://velawood.com/blog/) - Vela Wood Blog and Resources
- [409A vs. Venture Capital Valuations](https://velawood.com/409a-vs-venture-capital-valuations/) - Startups value their common and preferred stock differently: common through an independent 409A appraisal, and preferred through the price investors negotiate. Because the two price different securities, a company's 409A typically comes in well below its venture valuation — which is an expected gap within the capital structure.
- [The Sell Side: Preparing for an Exit](https://velawood.com/the-sell-side-preparing-for-an-exit/) - Most founders pour years into building their company — but when it's time to sell, they aren't actually ready. This series breaks down the deal dynamics that consistently cost sellers money, starting with the one thing you can control before a buyer ever shows up: your corporate records.
- [The Importance of Good Legal Housekeeping (Part 2)](https://velawood.com/the-importance-of-good-legal-housekeeping-part-2/) - Part 2 of our legal housekeeping series covers the tactical side of keeping your company in order: what to loop your attorney in on, the pitfalls that trip founders up most often (from 83(b) failures to messy cap tables), and a practical annual checklist to stay on track. Founders who treat housekeeping as routine move faster, spend less on clean-up, and enter due diligence in a much stronger position.
- [The Importance of Good Legal Housekeeping (Part 1)](https://velawood.com/the-importance-of-good-legal-housekeeping-part-1/) - From minute books and cap tables to board approvals and executed contracts, part one of this two-part series walks through what good legal housekeeping looks like—and why founders who treat it as a low priority tend to pay for it later in time, money, and stalled deals.
- [Management & Dental Service Organizations: A Primer](https://velawood.com/management-dental-service-organizations-a-primer/) - The MSO and DSO space is one of the most active and opportunity-rich areas in healthcare today — but the decisions you make at formation will shape your compliance structure, your ability to attract capital, and your eventual exit for years to come. Here's an overview of what founders, clinicians, and investors should consider when entering the space.
- [AI Chats and Discovery – Beware the Glass House](https://velawood.com/ai-chats-and-discovery-beware-the-glass-house/) - AI chats feel private — but in litigation, some aren't. Here's how courts are treating everyday business chats, pre-litigation prep, and conversations with counsel, plus how to avoid waiving privilege.
- [Choosing The Right Entity](https://velawood.com/choosing-the-right-entity/) - Choosing the right type of entity for your startup is very important and something you should likely discuss with an attorney. There are four general entity types to choose from, each with its own particular advantages and disadvantages. Sole Proprietorships A/K/A the “Default” option. A lot of times entrepreneurs will start their business without having
- [Don't Let Your Service Contracts Kill Your M&A Deal](https://velawood.com/dont-let-your-service-contracts-kill-your-ma-deal/) - This blog explains why service provider contracts—often overlooked during M&A transactions—can derail deals through hidden change-of-control, assignment, or termination clauses, and offers practical steps companies can take before and during a transaction to avoid last-minute surprises.
- [Hosting a Board Meeting? Here's how to do it well.](https://velawood.com/hosting-a-board-meeting-heres-how-to-do-it/) - Updated April 2026 Board meetings are essential to running a startup. While formal meetings are often neglected during the early stages of a startup, they quickly become a required quarterly event once a startup accepts institutional capital. Hosting the company’s first board meeting can be intimidating, but a well-executed meeting promotes confidence in your ability
- [Selected Offering Exemptions](https://velawood.com/private-offering-exemptions-crowdfunding-chart/) - To help you understand all of the available private offering exemptions, we’ve compiled details on the old Reg D avenues, and the new crowdfunding ones, into a single page and have created a handy chart for your review.
- [How VW Is Using AI](https://velawood.com/how-vw-is-using-ai/) - There are a lot of headlines right now about AI and the legal industry. In light of this focus, we wanted to share how we're using it at VW. Build vs. Buy We have made an intentional decision to build AI solutions, not buy them. The legal tech industry is flooded with AI-wrapped products right
- [Negative Covenants in Lending Transactions](https://velawood.com/negative-covenants-in-lending-transactions/) - In corporate loan agreements, negative covenants are restrictions and prohibitions that are designed to preserve the credit of the borrower as it was when the lender initially made its underwriting decision.
- [Are you acting as an Investment Advisor?](https://velawood.com/are-you-acting-as-an-investment-advisor/) - Advising on deals, investments, or market trends—even informally—can trigger investment adviser rules if you’re compensated in any way. Securities laws focus on conduct, not titles. If your guidance on securities is part of your business, registration or an exemption may be required.
- [Prediction Markets Are Sports Betting — And the Federal Government Is Looking the Other Way](https://velawood.com/prediction-markets-are-sports-betting/) - At VW, we're proud to represent dozens of gaming companies. I've personally been deep in the fantasy sports community for over 10 years, and it's been fun and intellectually stimulating to watch the evolution of DFS, DFS 2.0, and sports betting during that time. A constant thread has been a complex legal framework for operators
- [Startup Cents: Planning For Your First Year Of Legal Fees](https://velawood.com/startup-cents-planning-for-your-first-year-of-legal-fees/) - This blog explores what a startup can expect to spend on legal in its first year—typically $15,000–$20,000—including formation, founder and IP agreements, and core contracts.
- [The INVEST Act Just Passed The House — What It Could Mean For Venture Funds (And Their Advisers)](https://velawood.com/the-invest-act-just-passed-the-house-what-it-could-mean-for-venture-funds-and-their-advisers/) - The House-passed INVEST Act signals a major push to modernize venture capital regulation—potentially allowing qualifying VC funds to raise more capital, accept more investors, and gain flexibility around secondaries and fund-of-fund investing. While it’s not law yet, the bill offers venture managers and advisers an early roadmap for how fundraising, investor access, and compliance rules could shift in 2026.
- [Who's Drafting Your Pitch Deck In 2026?](https://velawood.com/whos-drafting-your-pitch-deck-blog/) - The following thoughts and links should provide some basic insight into how to produce an effective pitch deck that cleanly and accurately reflects your company and its potential.
- [Investment Advisor Registration FAQs](https://velawood.com/investment-advisor-registration-faqs/) - Investment adviser registration doesn’t change how you invest, but it does change how you operate. This guide walks through what registration really entails, including compliance obligations, individual licensing, SEC exams, and the practical impact on your firm.
- [Investment Advisor FAQs](https://velawood.com/investment-advisor-faqs/) - Most fund managers can rely on an investment adviser exemption early on—but only up to a point. This blog breaks down when private fund and venture capital advisers actually have to register, and the common triggers that signal it’s time to start planning.
- [Anonymity in Delaware (And How It Compares to Texas, Nevada, and Wyoming)](https://velawood.com/anonymity-in-delaware-and-how-it-compares-to-texas-nevada-and-wyoming/) - Founders often ask for an “anonymous LLC,” but what they usually mean is limiting how easily their name shows up in public state records. This post breaks down what anonymity actually means in practice, how Delaware compares to Texas, Nevada, and Wyoming, and where public disclosure tends to surface over time.
- [The Unintended Consequences of Too Many New Venture Funds](https://velawood.com/the-unintended-consequences-of-too-many-new-venture-funds/) - Venture capital activity is hotter than ever, which has led to more available capital and fueled the growth of many exciting companies. From 2020 to 2021, the aggregate deal value of VC investments in the U.S. increased from $167B to $330B.[1] In the same span, the number of deals increased from 12,173 to 17,054.[2] Increased
- [The Critical Role that Accelerators Play in Venture Financing](https://velawood.com/the-critical-role-that-accelerators-play-in-venture-financing/) - Seed capital provided by accelerators must be provided to startups with great care. Here are three ways accelerators can avoid causing long-lasting negative ramifications for startups.
- [The Mechanics of Converting Convertible Notes](https://velawood.com/the-mechanics-of-converting-convertible-notes/) - Convertible notes are a great tool for venture financing, however, the actual mechanics of converting convertible notes is not a simple task and requires great care.
- [SEC Amends 506(c) Accredited Investor Verification](https://velawood.com/sec-amends-506c-accredited-investor-verification/) - In 2021, one of the SEC amendments updated the accredited investor verification requirements under Rule 506(c), which is a common federal exemption utilized by startups to broadly solicit capital from accredited investors.
- [SEC Amendments Positively Impact Capital Formation For Emerging Companies](https://velawood.com/sec-amendments-positively-impact-capital-formation-for-emerging-companies/) - On November 2, 2020, the Securities and Exchange Commission (SEC) voted to amend the existing regulations and those rules went into effect on March 15, 2021. The SEC amendments change the landscape for small businesses and entrepreneurs seeking to raise capital through exempt offerings.
- [Restricted Equity v. Options & 83(b) Elections](https://velawood.com/restricted-equity-v-options-83b-elections/) - This blog explains the key differences between restricted equity and options as well as when an 83(b) election applies.
- [Beware Of Your First Investor](https://velawood.com/beware-of-your-first-investor/) - Raising capital is essential, but early deals can have lasting effects. Be strategic with your first raise, making sure today’s deal leaves room for tomorrow’s opportunities.
- [The Hidden Cost Of Accelerators](https://velawood.com/the-hidden-cost-of-accelerators/) - Accelerators can be a great boost for startups, but they also come with trade-offs. It’s important to look beyond the surface—some programs have terms or expectations that may not suit your long-term plans.
- [Buying What You Are Selling](https://velawood.com/buying-what-you-are-selling/) - Unless there is an exemption, an Investment Company needs to file with the SEC and make certain disclosures to investors.
- [The Advice You Give](https://velawood.com/the-advice-you-give/) - Generally, any time you are giving advice you need to register. Attorneys, accountants, psychologists, etc. There is no difference when you are giving advice on securities.
- [The Basics of Convertible Notes](https://velawood.com/the-basics-of-convertible-notes/) - The convertible note is a favorite investment vehicle for many founders and investors alike. This post outlines the key terms and explanations with regard to raising capital through or investing via a convertible note.
- [Incentive Stock Options v. Non-Qualified Stock Options](https://velawood.com/incentive-stock-options-v-non-qualified-stock-options/) - The key differences between ISOs and NQSOs lie in eligibility, tax treatment, and the restrictions that shape how employees and founders use them.
- [How Much Equity Should We Get?](https://velawood.com/how-much-equity-should-we-get/) - When dividing equity in a startup, it’s essential to ensure all founders vest, roles are clarified, thorough research is done, and the agreement is formalized with a startup attorney.
- [Pricing Stock Options (What's a 409A?)](https://velawood.com/pricing-stock-options-whats-a-409a/) - Equity is the currency of startups, but it comes with tax implications. Early shares usually have a minimal par value, while a 409A valuation sets the real market price as the company grows.
- [Grant Your Equity Wisely](https://velawood.com/grant-your-equity-wisely/) - Startups should allocate equity wisely, using it to reward contributors without risking the downsides of granting excessive shares.
- [Dilution Done Well](https://velawood.com/dilution-done-well/) - Dilution isn’t a loss—it’s leverage. Though each round reduces ownership, effective management turns dilution into a marker of growth.
- [Keep Your Investors Updated](https://velawood.com/keep-your-investors-updated/) - Keeping investors updated fosters trust, accountability, and support. Structured updates that cover progress, challenges, and asks keep investors engaged, prevent surprises, and set startups up for lasting success.
- [Understanding Representation & Warranty Insurance in M&A Transactions](https://velawood.com/understanding-representation-warranty-insurance-in-ma-transactions/) - Representation and Warranty Insurance (RWI) is becoming increasingly common in mid-market transactions as a tool to manage risk and streamline negotiations. This blog explains what RWI typically does - and does not - cover, its benefits for both buyers and sellers, and when to secure it within the transaction timeline.
- [Keep Your Early Rounds Small, Your Valuation Reasonable & Close Quickly](https://velawood.com/keep-your-early-rounds-small-your-valuation-reasonable-close-quickly/) - Dallas startups are on the rise, but too many early founders chase inflated valuations. This blog discusses why raising only what you need to reach your next milestone—and keeping valuations realistic—can give founders a stronger path to sustainable success.
- [Best Practices for Startup Boards](https://velawood.com/best-practices-for-startup-boards/) - A strong board isn’t just oversight—it’s a growth engine. From goal-setting to risk management, effective boards shape strategy, build accountability, and fuel success. This blog highlights key best practices to help boards perform at their highest level.
- [Post-Money Safe Does Not Mean Founders Equity is Safe](https://velawood.com/post-money-safe-does-not-mean-founders-equity-is-safe/) - Early-stage startups often raise funds using Safes (Simple Agreements for Future Equity), rather than selling equity immediately. Safes allow founders to delay valuation, maintain control, and simplify financing. Post-money Safes, now the industry standard, fix investor ownership upfront, making fundraising more predictable while emphasizing the importance of tracking dilution. Understanding both how Safes work and how they impact ownership is essential for founders and investors navigating early-stage fundraising.
- [Do I Really Owe Delaware $75,000??? Explaining Delaware Franchise Tax Calculations](https://velawood.com/do-i-really-owe-delaware-75000-explaining-delaware-franchise-tax-calculations/) - Every year around January or February we receive frantic calls and emails from a handful of clients who are utterly shocked by the franchise bill they just received from Delaware. “How can I owe $75,075 in franchise taxes??? We don’t have that kind of cash; do I have to raise more money just to pay this bill? Does this happen every year??”
- [IRS States That DFS Operators Are Liable For Excise Tax](https://velawood.com/irs-states-that-dfs-operators-are-liable-for-excise-tax/) - A recent IRS Internal Memorandum has ruled that DFS operators must pay federal excise taxes on entry fees, a viewpoint that, if enforced, could have widespread effects on the fantasy industry.
- [Equity Options for LLCs](https://velawood.com/equity-options-for-llcs/) - Issuing equity in LLCs can be complicated and lead to additional compliance and reporting obligations, and great care should be taken when determining the right equity structure. This blog is meant to serve as a brief introduction to four common ways of issuing equity in an LLC to compensate key service providers or employees.
- [Asset Allocation: Overlook at Your Peril](https://velawood.com/asset-allocation-overlook-at-your-peril/) - This blog post explains why the asset allocation matters, whether you are a buyer or a seller, and why this critical issue should not be an afterthought for the post-closing period.
- [Preserving QSBS: Initial Hurdles and Maintaining Eligibility](https://velawood.com/preserving-qsbs-initial-hurdles-and-maintaining-eligibility/) - QSBS offers major tax savings, but eligibility under Section 1202 is complex. This article highlights key risks—from stock issuance and asset limits to redemptions and transfers—that can jeopardize the exclusion.
- [What is an F-Reorganization?](https://velawood.com/what-is-an-f-reorganization/) - If you have tried to sell or buy a business that is an S-corporation for tax purposes recently, you may have run into the newly popular structure called the “F-Reorganization.” But what on earth is an F-reorganization? And why is it so popular? This blog post explains the structure.
- [Why the Venture Capital Operating Company Exemption Matters (and how a Management Rights Letter helps)](https://velawood.com/why-the-venture-capital-operating-company-exemption-matters-and-how-a-management-rights-letter-helps/) - If a venture capital fund plans to take money from an employee benefit fund and does not want to be subject to ERISA, it is imperative to always obtain a management rights letter that provides opportunities to exercise control and actually exercise those rights during the annual valuation period.
- [When is a Stock Sale not a Stock Sale? When it’s a Section 338(h)(10) Sale](https://velawood.com/when-is-a-stock-sale-not-a-stock-sale-when-its-a-section-338h10-sale/) - This blog discusses the differences between an acquisition structured as an Asset Sale versus one structured as a Stock Sale, as well as the Section 338(h)(10) election, which is used when the Buyer needs the transaction to qualify as a stock sale, but wants the advantages of asset sale tax treatment.
- [Equity & Equity-Like Plans for S Corporations](https://velawood.com/equity-equity-like-plans-for-s-corporations/) - This blog discusses which types of equity plans are, and are not, available for an LLC or corporation taxed as an s-corporation.
- [Understanding 83(b) Elections: A Crucial Step for Startup Founders and Employees](https://velawood.com/understanding-83b-elections-a-crucial-step-for-startup-founders-and-employees/) - If you’re a founder or an early employee at a startup, equity compensation is likely a significant part of your financial upside. However, the promise of equity can come with a maze of tax implications. Enter the 83(b) election: a relatively simple IRS filing that can save you thousands (or even millions) in taxes down the road. Despite its importance, many people overlook it—sometimes to their detriment.
- [QSBS Expansion – What You Need to Know](https://velawood.com/qsbs-expansion-what-you-need-to-know/) - Congress made major changes to QSBS, expanding who qualifies and how much gain can be excluded. The asset cap rose to $75 million, and investors can now exclude up to $15 million or 10× their basis—whichever is greater. Shorter holding periods also now qualify for partial tax breaks. These changes open the door for both investors and companies to benefit from this powerful tax incentive.
- [QSBS Planning for S Corps Under Section 1202](https://velawood.com/qsbs-planning-for-s-corps-under-section-1202/) - Many early-stage companies elect S corporation status to take advantage of the favorable tax treatment. However, as companies scale and plan for funding or an eventual exit, they often convert to a C corporation to qualify for the QSBS exclusion under Section 1202. This article explains the challenges S corporations face when looking to convert, and outlines the strategies that can help founders satisfy the requirements under Section 1202 and preserve eligibility for the tax exclusion at exit.
- [The Many Forms of Pay-to-Play](https://velawood.com/the-many-forms-of-pay-to-play/) - Pay-to-play rounds are becoming more common as startups deal with inflated past valuations and a tougher funding climate. Some structures penalize investors who don’t reinvest, others reward those who do, and hybrids combine both. Whether it’s a stick, a carrot, or a mix, these terms are reshaping cap tables and investor relationships across the venture landscape.
- [ChatGPT as Opposing Counsel](https://velawood.com/chatgpt-as-opposing-counsel/) - AI tools like ChatGPT can be useful for legal research and brainstorming, but they often generate inaccurate or misleading information. When non-lawyers solely rely on these tools for legal decisions, the consequences can be costly.
- [The Future of DFS in California After the State Declares Paid Contests Illegal](https://velawood.com/future-of-dfs-in-california/) - On July 3, 2025, the California Attorney General issued an advisory opinion declaring all paid daily fantasy sports (DFS) contests illegal under California law. This ruling puts the future of DFS in California—one of the nation’s largest markets—in jeopardy and raises concerns about potential ripple effects in other states. While some states have issued similar negative opinions, their impact has varied, with courts or legislatures sometimes overturning or clarifying DFS legality.
- [Preferred Economics in Venture Transactions](https://velawood.com/preferred-economics-in-venture-transactions/) - Venture financing isn’t just about valuation—it’s about how the deal is structured. Liquidation preferences and participation rights can dramatically impact founder payouts and investor returns in an exit. This article breaks down the most common preference structures, from 1x non-participating to capped participation, and explores how seniority and stacking work across multiple rounds.
- [What’s New in Delaware? Key Corporate & LLC Changes Every Business Should Know in 2025](https://velawood.com/whats-new-in-delaware-key-corporate-llc-changes-every-business-should-know-in-2025/) - In March 2025, Delaware overhauled its General Corporation Law, introducing major changes that impact how companies handle conflicted transactions, board approvals, and stockholder rights. These updates aim to reduce legal uncertainty and bring clearer standards for directors, officers, and controlling stockholders. Here's a quick look at what’s changed—and why it matters.
- [Primer on Qualified Small Business Stock (QSBS)](https://velawood.com/primer-on-qualified-small-business-stock-qsbs/) - Startup founders, early employees, and investors may be missing out on a major tax advantage. Thanks to the Qualified Small Business Stock (QSBS) federal income tax exclusion, eligible stockholders can potentially exclude up to 100% of capital gains upon an exit—saving millions in federal taxes. Understanding the key requirements and potential pitfalls of QSBS can make a significant impact on your financial outcome. Here’s what you need to know to maximize this powerful tax benefit.
- [Private Funds, Public Rules - What Fund Managers Need to Know](https://velawood.com/private-funds-public-rules-what-fund-managers-need-to-know/) - This blog breaks down what qualifies as an “investment company” under federal law and explains how private fund managers—like those running hedge funds or venture capital firms—can avoid burdensome public registration by meeting key legal exemptions.
- [Sports Betting Bills “Adjourned Sine Die” In The Lone Star State — What Is Next For Texas?](https://velawood.com/sports-betting-bills-adjourned-sine-die-in-the-lone-star-state-what-is-next-for-texas/) - Texas wrapped up its 2025 legislative session with several sports wagering bills left on the table. This blog covers when the next chance will be to legalize sports wagering in Texas and what the industry should do in the meantime.
- [Where Every Startup & Small Business Should Begin](https://velawood.com/where-every-small-businessstartup-should-begin/) - One of the best things about running a boutique law firm is that we really get to dive into our clients' businesses and help them from the ground up. Every day we receive calls from small business owners, rogue inventors, and budding entrepreneurs who are filled with excitement about their brainchild but are looking for
- [All Startups Should Be C Corps, But Not Necessarily In Delaware](https://velawood.com/all-startups-should-be-c-corps-but-not-necessarily-in-delaware/) - In this blog, we discuss why C corps remain the best choice for startups seeking venture capital and explore recent court decisions that have made Delaware a less obvious choice for incorporation, prompting companies to consider alternatives like Texas and Nevada.
- [Sports Betting & Fantasy Sports Regulation Map](https://velawood.com/sports-betting-fantasy-sports-regulation-may-2025/) - A map displaying the overlap between sports betting and fantasy sports regulation in the US presented by VW Partner Kevin Vela at the SBC Summit Americas in May 2025.
- [Why Playing Fantasy Sports Is Legal (For The Most Part) Part II](https://velawood.com/why-playing-fantasy-sports-is-legal-for-the-most-part-part-ii/) - Discussion on the legality of Fantasy Sports gambling.
- [Finding Angel Investors In Texas](https://velawood.com/find-angel-investor-texas/) - This blog was originally published in March of 2016 but was revised in May of 2025 and is still accurate. One of the most common questions I get from my startup clients is, “Can you help me find investors?” The answer is always a very lawyerly, “Well, yes and no.” I generally hate it when
- [Startup Starter Pack](https://velawood.com/startup-starter-pack/) - Whether you’re an aspiring entrepreneur with a game-changing idea or just a dedicated Silicon Valley viewer who just wants to understand the ups and downs of Pied Piper, we’ve got resources to help you get there.
- [Negotiating Warrant Terms in Venture Financings](https://velawood.com/negotiating-warrant-terms-in-venture-financings/) - Warrants are a common feature in venture financings, offering investors additional upside while impacting founder dilution and control. In this blog, VW attorney Bobby Gojuangco breaks down key warrant terms and explains why understanding them is critical to protecting your company’s long-term capitalization strategy.
- [Venture in the Middle 2024 Trends](https://velawood.com/venture-in-the-middle-2024-trends/) - In 2024, VW saw a sharp rise in pay-to-play financing rounds, reflecting tougher conditions for both startups and investors. While the market experienced corrections in valuations, early-stage venture funding remained strong and Safe notes remained the dominant financing tool.
- [Design Is About Input](https://velawood.com/design-is-about-input/) - Between the law firm, other startups I've started, and advising clients, I've interacted with hundreds of designers and developers through the years. The most critical thing that I've learned is that design is about input, not output. Let me give you an example - let's say you have an idea to start a mobile convenience
- [Wyoming: Move Over, Delaware!](https://velawood.com/wyoming-move-over-delaware/) - Wyoming’s 2019 legislative session just wrapped up, and as of close the state has signed 13 blockchain-friendly laws into effect. These laws are a strong play to attract blockchain businesses and development to the state of Wyoming.
- [This is Howey. Do it.](https://velawood.com/this-is-howey-do-it/) - Earlier this month, the SEC posted guidance and a No-Action letter to Turnkey Jets, giving more insight into the particular way the Howey test is applied to tokens.
- [Blockchain Breakfast Summer Series, Part 1: Weird Use Cases](https://velawood.com/summer-series-part-1-recap/) - This Tuesday, Vela Wood hosted the first of its three-part “Blockchain Breakfast” series. James Johnson joined us to “get weird with blockchain.” James is the co-founder and CMO of Oaken Innovations, a blockchain software company focused on automotive mobility applications.
- [Equity Incentive Plans for Startups – An Overview](https://velawood.com/equity-incentive-plans-for-startups-an-overview/) - The purpose of this blog post is to provide an overview of some of the most important components of equity incentive plans, including the common types of awards granted, the timing provisions associated with the awards, and the typical share pool size of equity incentive plans.
- [Forming an Entity (LLC v. C-Corp)](https://velawood.com/forming-an-entity/) - This blog was originally published in March of 2018 but was revised in January of 2025 and is still accurate. Okay - it's time to actually form the business. You've built your pitch deck, received feedback from naysayers, visited with your attorney, and worked out the structure with your co-founders. The next step is to
- [U.S. Department of Labor 2024 Overtime Rule Struck Down by Texas Court](https://velawood.com/u-s-department-of-labor-2024-overtime-rule-struck-down-by-texas-court/) - On November 15, 2024, a Texas Federal Court ruled that the Department of Labor (DOL) exceeded its authority in raising the salary thresholds required for certain employees to qualify as exempt from overtime. The Court’s decision nullifies the 2024 Final Rule, effectively resetting salary thresholds to their pre-2024 levels.
- [How much equity should I grant to advisors?](https://velawood.com/how-much-equity-should-i-grant-to-advisors/) - Clients regularly ask a variation of the above question, replacing advisor with CTO, COO, sales manager, front-end engineer, etc. It’s a great question. And one with varying answers and consequences depending on a company’s lifecycle stage. As a founder, one must understand that a company who has completed a late-stage financing round (Series A, Series B, etc.) can’t dispense equity like a fledgling startup can. Why not?
- [Which insurance does my startup need?](https://velawood.com/which-insurance-does-my-startup-need/) - At some point in time, the topic of insurance will come up. Every startup and small business will need insurance, and for a mature business, an insurance guy is one of the four pillars of your business. We’re by no means insurance experts here, but we want to outline a few common types that you’re
- [Getting To “No”](https://velawood.com/getting-to-no/) - One of the biggest frustrations we hear from our clients about the capital raise process is that VCs are non-responsive or unwilling to make a firm investment decision. To help with this, I reached out to several VCs whom we see on a regular basis to ask for their input.
- [Texas Data Privacy & Security Act](https://velawood.com/texas-data-privacy-security-act/) - This blog focuses on the Texas Data Privacy and Security Act (TDPSA) which establishes new consumer privacy rights and imposes data security obligations on qualifying businesses, effective July 1, 2024. If you conduct business in Texas or handle Texas residents' personal data, it's essential to understand these requirements and take steps to ensure compliance.
- [The Power of an LOI](https://velawood.com/the-power-of-an-loi/) - This blog post explains why a Letter of Intent (LOI) is essential in acquisition transactions, despite initial alignment between parties. It outlines how an LOI benefits both buyers and sellers by clarifying key financial and legal terms, setting expectations, and providing enforceable confidentiality and exclusivity.
- [What Is A Search Fund & Why Should You Start One?](https://velawood.com/what-is-a-search-fund-why-should-you-start-one/) - Starting a search fund offers a direct path to leading a profitable business. This blog covers the history, mechanics, and life cycle of a search fund, as well as the characteristics of companies targeted by search funds.
- [10 Startup Pitch Tips](https://velawood.com/pitch-tips-1/) - This blog was originally published in December of 2013 but was revised in June of 2024 and is still accurate. In my role as a venture attorney, I receive a handful of pitch decks each week and see hundreds of pitches each year. I see these pitches in my office, at pitch days, at startup
- [Stockholders' Rights of Venture Investors After Moelis](https://velawood.com/stockholders-rights-of-venture-investors-after-moelis/) - This blog explores the tension between Delaware corporate law's board management principle and investor demands for control, highlighting legal challenges and potential legislative changes to the Delaware General Corporation Law after the Moelis decision.
- [The Company Agreement Explained: Member-Managed v. Manager-Managed](https://velawood.com/the-company-agreement-explained-member-managed-v-manager-managed/) - Discusses the options of Member-Management and Manager-Management.
- [Comparing the Conversion Mechanics of Safes and Convertible Notes](https://velawood.com/comparing-the-conversion-mechanics-of-safes-and-convertible-notes/) - This blog focuses on understanding the conversion mechanics of Safes versus Convertible Notes, which is essential for founders navigating pre-seed financing, as they differ in their treatment of shares outstanding and impact the equity distribution among stakeholders.
- [A Primer On Trademarks](https://velawood.com/vk-primer-on-trademarks/) - This blog was originally published in February of 2012 but was revised in May of 2024 and is still accurate. So, what’s the difference between ™ and ®, you ask? While both represent claims to trademark rights, there are distinctions for when each should be used. The ™ Symbol Usually shown in superscript or subscript
- [More Series LLC FAQs](https://velawood.com/more-series-llc-faqs/) - This blog was originally published in March of 2013 but was revised in April of 2024 and is still accurate. Here at VW, we receive legal questions from prospective clients via phone, web, and email every day, and it seems like a lot of people are asking questions about Texas Series LLCs in particular. Considering
- [Anonymity In Delaware](https://velawood.com/anonymity-in-delaware/) - Small changes mean a big difference for corporate privacy in Delaware.
- [General Update on Pick’em Contests](https://velawood.com/general-update-on-pickem-contests/) - For our Fantasy Sports and Gaming clients, VW Senior Attorney Blake Hart has provided an update on the evolving situation with Pick'em contests!
- [Crowdfunding, Part II](https://velawood.com/crowdfunding-part-ii/) - This blog was originally published in July of 2012 but was revised in February of 2024 and is still accurate. With the recent passage of the JOBS Act, unaccredited investors are poised to enter into the startup funding arena in hordes. As I discussed in my earlier post on crowdfunding, the JOBS Act has removed
- [Crowdfunding - What Can We Learn From Kickstarter Stats?](https://velawood.com/crowdfunding-what-can-we-learn-from-kickstarter-stats/) - This blog was originally published in July of 2012 but was revised in February of 2024 and is still accurate. Mashable released a fascinating set of infographics regarding Kickstarter from a recent Appsblogger.com story (I'm not clear on who created the infographics, so I'll credit them both - they are beautiful), so I wanted to discuss
- [Early Thoughts On Crowdfunding](https://velawood.com/early-thoughts-on-crowdfunding/) - This blog was originally published in April of 2012 but was revised in February of 2024 and is still accurate. Get ready for crowdfunding mania. The next big buzz word is here. So what does it mean? In short, crowdfunding is funding projects through the collective efforts of a number of unrelated individuals. It has
- [Another Look At Texas Series LLCs](https://velawood.com/another-look-at-texas-series-llcs/) - This blog was originally published in January of 2012 but was revised in February of 2024 and is still accurate. Well, it's been nearly three months since we've last discussed Texas Series LLCs as a great tool for investors. That does not seem like long, but since they are the infants of the Texas entity world,
- [Franchise Tax Treatment Of Texas Series LLCs](https://velawood.com/franchise-tax-treatment-of-texas-series-llcs/) - (Disclaimer - I am not an accountant, much less a CPA. The info below is informational only and is intended to provoke further discussion in the rapidly evolving world of Texas Series LLCs. Please consult with your attorney and CPA prior to filing your Texas Franchise Taxes.) As I have written before, the Texas Series
- [Corporate Transparency Act Q&A](https://velawood.com/corporate-transparency-act-qa/) - We answer some FAQs about the Corporate Transparency Act, which requires most businesses to file a Beneficial Ownership Information report to report certain information regarding the business, its beneficial owners, and company applicants.
- [What We Learned From A Month Working Abroad](https://velawood.com/what-we-learned-from-a-month-working-abroad/) - Over half the firm and their families traveled to Lisbon, Portugal for Vela Wood's first VW Abroad trip, and it was an astounding success. In this blog, we walk through the logistics of the trip as well as what went well and what we'll do differently next time.
- [How to Angel Invest](https://velawood.com/how-to-angel-invest/) - You’ve noticed it everywhere. Whether you see Mr. Wonderful grilling someone on Shark Tank, hear about Kevin Durant building a tech empire and basketball dynasty in California, or read about George Clooney selling a Tequila brand for $1 billion, everyone seems to be putting their money to work by investing in startups. It's understandable that
- [How to Angel Invest: What is an Accredited Investor?](https://velawood.com/how-to-angel-invest-what-is-an-accredited-investor/) - Who can play the game Angel Investors are individuals who provide seed or startup financing to entrepreneurs. If you give your little brother a few hundred dollars to start a business, technically, you’re an angel investor. However, the more intricate transactions and deal flow are reserved for accredited investors. Qualifying as an Accredited Investor: Easy
- [How to Angel Invest: Where to Find Deals](https://velawood.com/how-to-angel-invest-where-to-find-deals/) - After confirming your accredited investor status, the next step is to find promising companies. Serendipity is definitely a factor; however, you can approach finding deals in a systematic way. Identify Local Angel Networks Local angel networks are the safest and smartest way to accelerate your angel investing opportunities. By joining an angel network, deals come
- [How to Angel Invest: Understanding Risk](https://velawood.com/how-to-angel-invest-understanding-risk/) - Before you begin throwing money at startups, it's important to understand the risk involved with investing. Venture capitalist, Sammy Abdullah, believes “angel investing is the absolute hardest thing to do in investing.” Angel investing can be fun and exciting, but like any investment, you’re not guaranteed a return. Here are a few considerations: Failure Starting
- [How to Angel Invest: How Much to Invest](https://velawood.com/how-to-angel-invest-how-much-to-invest/) - Disclaimer: This blog post should not be viewed as investment advice. Investors should speak to their investment advisor before making any investments. The ideas in this post are a summary of ideas presented by David Rose in his book, Angel Investing. For a deeper understanding of angel investing and to read these ideas in context, we
- [How to Angel Invest: The Process](https://velawood.com/how-to-angel-invest-the-process/) - After you’ve determined whether you’re accredited, discussed angel investing with your investment advisor, created systematic deal flow, and put your expectations in check, it’s finally time to begin the process. Here is an outline of what that looks like. Once you’ve identified a company or investment opportunity… Identify a Startup Lawyer Now will be the
- [Startup Ecosystems Are Bridging the World](https://velawood.com/startup-ecosystems-are-bridging-the-world/) - Having been fortunate enough to participate in pitch competitions in three countries – the U.S., Dominican Republic, and Brazil – we have learned that startups are a great equalizer.
- [Why We're Sending a First-Year Attorney to Portugal](https://velawood.com/why-were-sending-a-first-year-attorney-to-portugal/) - We feel strongly that employees can be productive remotely and that travel will actually motivate and develop them, and make them better employees. Rad and I are calling this Desk Independence™, and we believe it's the next big thing.
- [The Road Forward - Week 2 Working in Portugal](https://velawood.com/the-road-forward-week-2-working-in-portugal/) - My great opportunity was not to just remotely work in Lisbon; the importance of Desk Independence is growth through travel, not travel to one city. Thus, I decided I needed to be more intentional about my trip. Exploring. Experiencing culture. Expanding and adventuring in every direction. I need to move beyond the Lisbon metropolitan area.
- [Como Pode Ajudá-Lo Hoje? How May I Help You Today?](https://velawood.com/como-pode-ajuda-lo-hoje-how-may-i-help-you-today-blog/) - At twenty-five, I had never been out of Texas for more than a week at a time. That changed when I traveled to South East Asia in August 2016 for twenty-six days. What was initially a begrudging, feet-dragging twenty-two days abroad, turned into a life-changing experience.
- [Week 3 in Portugal: Exploring the “City that Works”](https://velawood.com/week-3-in-portugal-exploring-the-city-that-works/) - As an industrial town, Porto is proud of its blue-collar tradition—indeed, residents refer to it as the “City that Works,” as opposed to the flashy, apparently not-working city of Lisbon. But, with the lush facilities at the LX Factory left behind in Lisbon, my work for the first time grew unexpectedly difficult.
- [Saying Goodbye to Portugal](https://velawood.com/saying-goodbye-to-portugal/) - Notably, this adventure has made me a better person. With manufactured societal restraints stripped away, I’ve been able to become friends with people I often wouldn’t and understand sides of them I never could have imagined.
- [What a month in Croatia taught me about entrepreneurship in the U.S.](https://velawood.com/what-a-month-in-croatia-taught-me-about-entrepreneurship-in-the-u-s/) - They say travel changes you. But you can travel the entire world and never actually change. To be impacted by travel, you have to travel intentionally – you have to engage people, explore places, and embrace ideas. Thanks to Vela Wood, I spent the last month doing just that. Understanding the many benefits of travel
- [Nic's First Week Working in Lisbon, Portugal](https://velawood.com/nics-first-week-working-in-lisbon-portugal/) - Lisbon is beautiful. From the picturesque graffiti street murals to the 17th century mosaic tiled streets, a touch of modern is entwined with the city’s aging architecture. Including, the LX Factory. The LX Factory is the co-working space in Lisbon. We have 24/7 access to this beautiful space. The LX Factory is located in between
- [ESOP v. Stock Options: What’s the difference?](https://velawood.com/esop-v-stock-options-whats-the-difference/) - We often get clients asking for an ESOP Plan when they are actually thinking of a Stock Option Plan or Equity Incentive Plan. In this blog, we go over the difference between an Employee Stock Ownership Plan and Stock Options.
- [A State Law Approach to Student Athlete Name, Image, and Likeness Rights: A Guide for Interpreting Each States’ Legislation](https://velawood.com/a-state-law-approach-to-student-athlete-name-image-and-likeness-rights-a-guide-for-interpreting-each-states-legislation/) - The purpose of this article is to update and summarize the existing and differing state legislation currently in place regarding student athletes’ name, image, and likeness rights.
- [Understanding Authorized, Issued and Reserved Shares](https://velawood.com/understanding-authorized-issued-and-reserved-shares/) - In this blog we explore the difference between a corporation’s authorized, issued and reserved shares and some corporate governance considerations to keep in mind as shares, options, and warrants are being issued to founders, service providers, and investors.
- [A Guide to the 2023 MLS Superdraft](https://velawood.com/a-guide-to-the-2023-mls-superdraft/) - The Major League Soccer (MLS) Superdraft is the main path for top college soccer players to enter the professional game in the US. joining MLS. This guide will help you navigate through the process of being drafted.
- [Dmitry Makarov, Russian Professional Exchange In Vela Wood Austin](https://velawood.com/dmitry-makarov-russian-professional-exchange-in-vela-wood-austin/) - Learn more about our 2018 Russian Business Leaders (RBL) Fellow Dmitry Makarov, an attorney and entrepreneur from Saint-Petersburg, Russia and his research on the differences and similarities in legal procedures of starting and running businesses in the Russian Federation and the United States.
- [Meet Our Entrepreneur In Residence From The Dominican Republic](https://velawood.com/meet-our-entrepreneur-in-residence-from-the-dominican-repubilc-blog1/) - Learn more about the Young Leaders of the Americas Initiative (YLAI) program and our first YLAI Fellow in 2017 - Arístides Rubio, an attorney and entrepreneur from Santo Domingo, Dominican Republic.
- [From The DR To Dallas: What Arístides Learned At Vela Wood](https://velawood.com/from-the-dr-to-dallas-what-aristides-learned-at-vela-wood/) - Our 2017 YLAI Fellow Arístides Rubio reflects on his YLAI experience and his 5 weeks living in Dallas with Vela Wood as his host.
- [Bringing Startup Culture To Law In Brazil](https://velawood.com/bringing-startup-culture-to-law-in-brazil/) - A Q&A with our 2018 YLAI Fellow Fabio Cendão, an attorney and entrepreneur from Rio de Janeiro, Brazil, regarding his fellowship, his work in Brazil, and his time at Vela Wood and in Dallas.
- [Indemnification in M&A Contracts Part V: Materiality Scrapes](https://velawood.com/indemnification-in-ma-contracts-part-v-materiality-scrapes/) - Our fifth and final post regarding indemnification in M&A takes us on a journey through Materiality Scrapes.
- [Indemnification in M&A Contracts Part IV: Caps, Baskets, and Deductibles](https://velawood.com/indemnification-in-ma-contracts-part-iv-caps-baskets-and-deductibles/) - Part IV in our series on indemnification focuses on caps, baskets, and deductibles.
- [Indemnification in M&A Contracts Part II: Indemnification “Claims”](https://velawood.com/indemnification-in-ma-contracts-part-ii-indemnification-claims/) - Part II of our series on Indemnification in M&A Contracts focuses on the wide scope of potential claims covered by indemnification.
- [Indemnification in M&A Contracts Part III: Time Period for Indemnification (aka. The Survival Periods)](https://velawood.com/indemnification-in-ma-contracts-part-iii-time-period-for-indemnification-aka-the-survival-periods/) - Part III in our series on Indemnification in M&A takes us to Time Periods for Indemnification.
- [Indemnification in Mergers and Acquisitions Contracts](https://velawood.com/indemnification-in-mergers-and-acquisitions-contracts/) - Indemnification is one of the most important, but least understood, parts of an M&A transaction. In this blog series, we will be covering the different aspects of the Indemnification Section of the Purchase Agreement. Part 1 will discuss what indemnification is and the process for indemnification under the agreement.
- [Comparing Convertible Instruments](https://velawood.com/comparing-convertible-instruments/) - In this blog, we explain the key similarities and differences between convertible notes and post-money Safes so you can understand the nuances between convertible instruments before you get to the negotiation table.
- [Why Playing Fantasy Sports Is Legal (For The Most Part)](https://velawood.com/why-playing-fantasy-sports-is-legal-for-the-most-part/) - Fantasy Sports Leagues are the sports fanatics newest obsession when it comes to connecting with other fans and bragging rights. And gambling on fantasy sports happens to be legal...for the most part.
- [Mistakes that Take the Cake](https://velawood.com/mistakes-that-take-the-cake/) - Corporate attorneys tend to see recurring mistakes that businesses make, and the large impact they can have. This article summarizes four common errors we see at Vela Wood, in the hopes that you (the reader) can avoid them. State Annual Filings Many businesses forget to file or simply ignore business annual reports that most states
- [If I Were Starting A Business…](https://velawood.com/if-i-were-starting-a-business/) - There has never been a better time to start a business. The power of the internet coupled with plummeting startup costs (and if you're in the US - advantageous tax regulations) creates the perfect backdrop for anyone looking to start their own business. As a corporate lawyer who works primarily with startups and small businesses
- [Why You Should Be Anti Anti-Dilution](https://velawood.com/why-you-should-be-anti-anti-dilution/) - A client, who had already raised some money and thus had a few people on his cap table, came in recently with a term sheet whereby the prospective investor had requested “anti-dilution” protection. If you’re not familiar with anti-dilution, it basically means that the investor’s ownership stake in the company cannot be diluted by subsequent
- [What's The Difference Between A Small Business And A Startup?](https://velawood.com/whats-the-difference-between-a-small-business-and-a-startup/) - What's the difference between a small business and a startup? Structurally - a lot. Operationally - not much. And I'll explore that throughout this series. To me, startups are a subset of small businesses. They are both initially owned by a few people, they need the same inputs (labor + capital), and they have the
- [Your Idea Is Worth Nothing](https://velawood.com/your-idea-is-worth-nothing/) - "I've got this great idea..." How many times have you heard that? For me, it’s weekly, if not daily. But no one makes money on an idea. As a founder, you have to realize that ideas are easy, they are cheap, and everyone has one. Too often I see people (not sure if I'd call
- [Pitch Decks Are The New Business Plan](https://velawood.com/pitch-decks-are-the-new-business-plan/) - Back in the day, like, the early aughts, it was widely believed that you needed a 20 to 40-page business plan and 40-80 hours to create it. The business plan was a written record and forecast of your idea, replete with charts, graphs, and citations to external resources. This has been replaced by the modern-day
- [Find Some Naysayers](https://velawood.com/find-some-naysayers/) - A common mistake that I see aspiring entrepreneurs make all too often is failing to find anyone who will challenge their idea. I addressed this in my review of Silicon Valley S3, Ep7. Affirmation from loved ones is often a sign of love and affection, not confirmation of a good idea. An entrepreneur will show
- [Make An Investment In Legal](https://velawood.com/make-an-investment-in-legal/) - A question I often hear from startups when discussing initial legal work is, “How much will this cost?” This is the wrong question - most startups are looking at their legal expense the wrong way. They should be asking, “How much will this save me?” You see, bad legal records can end up taking significant
- [Everyone Should Vest](https://velawood.com/everyone-should-vest/) - One of the biggest mistakes that startups make is failing to place vesting conditions on founders' equity. Here's an example: Two founders, Adam and Blake, are working on their startup, and everything is butterflies and rainbows. They have a great idea, a hot pitch deck, and lots of wishful thinking. They are looking at a
- [How Founder "Vesting" Really Works](https://velawood.com/how-founder-vesting-really-works/) - Vesting is the process whereby a recipient of equity earns the equity, or the right to purchase it in the case of options, over time. As I mentioned in my last post, the typical schedule is 4 years with a 1-year cliff. But if a founder doesn’t actually own the equity on day one, how are decisions
- [Working With Developers](https://velawood.com/working-with-developers/) - Failure to have a clear written agreement with developers is the most frequent problem I see with early-stage companies. And one that is completely avoidable. Here are a few common issues.
- [Finding a CPA](https://velawood.com/finding-a-cpa/) - As I've discussed before, the four external pillars of any small business are a lawyer, a CPA, a banker, and an insurance broker. Each of these professionals will be critical to the growth and health of your business. The first two that you need to find are a CPA and an attorney, in no particular
- [The Three Levels of Control Within an Organization](https://velawood.com/the-three-levels-of-control-within-an-organization/) - A common misconception in any startup is thinking ownership percentage equates directly with control. While it’s true that the majority equity holder(s) usually controls the business, this isn’t necessarily always the case. Let’s break it down. Day-to-Day Operations Day-to-day operations are generally managed by the President or CEO (typically the same person in an early-stage
- [Understanding Basic Contracts: The Termination Clause](https://velawood.com/understanding-basic-contracts-the-termination-clause/) - A client of mine called me last week to express her frustration with a vendor. The vendor wasn't turning around the work in a timely fashion, and this was severely impacting her business. She wanted out of the contract. My first response was, "Which vendor was this, and how come I didn't review the contract?"
- [Understanding Basic Contracts: Terminating for Material Breach](https://velawood.com/understanding-basic-contracts-terminating-for-material-breach/) - All contracts will have a term (length of the agreement) and termination (how you terminate the agreement) clause. Well, they should have a termination clause. As I wrote last time, it’s important to take great care in reviewing your contracts before executing them. Let's take a look at typical termination clauses. There are two basic
- [Understanding Basic Contracts: The Indemnification Clause](https://velawood.com/understanding-basic-contracts-the-indemnification-clause/) - One of the most confusing, yet critical, sections of a contract is the indemnification section. Hard word, hard section. Hopefully this blog will help. "To indemnify" means to compensate someone for his/her harm or loss. In most contracts, an indemnification clause serves to compensate a party for harm or loss arising in connection with the
- [Understanding Basic Contracts: The Payment Provision](https://velawood.com/understanding-basic-contracts-the-payment-provision/) - I know, it seems like a simple contractual provision. It can be, but a lack of detail in the payment section of a contract can be disastrous. Take the following provision for example: Payment: "Contractor shall be paid $40,000 for the deliverables set forth on Exhibit A." When is the payment to be made? Up
- [Understanding Basic Contracts: The (Ir)Relevant Title](https://velawood.com/understanding-basic-contracts-the-irrelevant-title/) - A client reached out yesterday to ask what the difference was between an independent contractor agreement and a master services agreement. He had two sitting in his inbox – different titles, though they were for the same project. At their core, they are the same thing: a services agreement. In fact, there really isn’t much
- [Let’s All Use Lego® Bricks. ](https://velawood.com/lets-all-use-lego-bricks/) - Venture financing rounds need to be constructed so that they can stack neatly on top of each other. Angel on top of Friends & Family, Series Seed on top of Angel, Series A on top of Series Seed, Series B on top of Series A, and so on.
- [The Changing Landscape of Private Fund Investing](https://velawood.com/the-changing-landscape-of-private-fund-investing/) - Ten years ago, private fund terms were relatively standard. That is no longer the case. Not only have things changed greatly from what we saw a decade ago; but now, there is considerable variety between private funds.
- [Private Fund Related Exemptions – An Overview](https://velawood.com/private-fund-related-exemptions-an-overview/) - In order to launch a private fund, you must ensure that you have qualifying exemptions for both (1) the offering of interests of your private fund entity and (2) the making of investment decisions for compensation on behalf of the private fund.
- [Understanding Basic Contracts: Liability Limitations](https://velawood.com/understanding-basic-contracts-liability-limitations/) - We are back with our Understanding Basic Contracts series with a post about the often seen, but little understood, “Liability” or “Liability Limitation” Section. The liability limitation section, much like the indemnification clause, is all about allocating risk and monetary exposure between the two parties to an agreement. Generally, one party to a contract is
- [Series A is Closed. Now what?](https://velawood.com/series-a-is-closed-now-what/) - There are a number of post-funding boxes to check off and the purpose of this blog is to give founders a starting point for next steps after completing a Series A financing.
- [Equity Crowdfunding](https://velawood.com/equity-crowdfunding/) - Equity crowdfunding is a way for private businesses to raise capital from multiple investors via online platforms.
- [Why Your Small Business Should (Likely) Be An LLC](https://velawood.com/why-your-small-business-should-likely-be-an-llc/) - UPDATE: This blog was formerly titled, "Why Your Startup Or Small Business Should (Likely) Be An LLC." However, after the passing of the Tax Jobs and Cuts Act of 2017, we removed "startups" from the title. You see, in the venture world, conventional wisdom has always held that a C-Corporation was the best vehicle for
- [Crowdfunding in Texas & Minnesota](https://velawood.com/crowdfunding-in-texas-minnesota/) - This article explains more about recent crowdfunding regulations, including recent federal changes and state crowdfunding offerings in Texas and Minnesota.
- [Nothing Can Compete with Mergers and Acquisitions](https://velawood.com/nothing-can-compete-with-mergers-and-acquisitions/) - This article explains the general features of non-compete and non-solicitation clauses in the context of mergers and acquisitions, including key items to consider for owners and companies alike.
- [What’s In a Name: A Primer on Types of Agreements](https://velawood.com/whats-in-a-name-a-primer-on-types-of-agreements/) - This is a brief primer regarding the typical names and usages of different types of product and service agreements, particularly in the technology space, so you have a better understanding of what types of agreements you might need for your startup’s services and products; and what to expect from someone else.
- [Are you ready for an exit transaction? (Probably not.)](https://velawood.com/are-you-ready-for-an-exit-transaction-probably-not/) - With exit deals potentially around every corner, most founders are not asking themselves (and probably should be), if the Company is ready for an exit transaction and the scrutiny that comes with it. This article explains the basic steps of a merger or acquisition transaction, so that you can better understand what to expect at exit.
- [Texas DFS Bill – H.B. 393](https://velawood.com/texas-dfs-bill-h-b-393/) - H.B. 393 seeks to legalize fantasy sports contests by amending the Texas Penal Code’s definition of “bet” to exclude prizes or awards won in a fantasy sports contest. The language is mostly consistent carve-out language but there are two key additions which could have a material effect on contests currently being offered in the state.
- [Texas Sports Betting Bill – H.B. 1121](https://velawood.com/texas-sports-betting-bill-h-b-1121/) - A recent bill authorized by Representative Harold Dutton of Houston on January 12, 2021 seeks to legalize sports betting in Texas. The bill aims to allow authorized permit holders to offer sports betting through their designated electronic platforms.
- [Texas Amendment Would Open Door For Commercial Casinos](https://velawood.com/texas-amendment-would-open-door-for-commercial-casinos/) - On February 8, 2021, San Antonio Democratic Senator Roland Gutierrez filed Senate Joint Resolution 36 (SJR 36 or hereafter, the “Amendment”) in an effort to amend the Texas Constitution and thus pave the way for commercial casinos in Texas. If passed, the Amendment opens the door for the Texas legislature to pass laws permitting the
- [Securities Straight Talk Vol. 4: Why you Need to Consider Blue Sky Laws Before Conducting a Capital Raise](https://velawood.com/securities-straight-talk-vol-4-why-you-need-to-consider-blue-sky-laws-before-conducting-a-capital-raise/) - Not taking securities laws into account prior to the start of your offering can create a dark cloud over your otherwise bright, sun-shiny raise.
- [Securities Straight Talk Vol. 3: Keeping it Local—Changes to the Rule 147 Intrastate Offering Exemption](https://velawood.com/securities-straight-talk-vol-3-keeping-it-local-changes-to-the-rule-147-intrastate-offering-exemption/) - The SEC, wishing to facilitate capital formation by smaller companies, amended Rule 147 and adopted Rule 147A to modernize the intrastate offering exemption. These changes have liberalized the Rule 147 safe harbor and expanded the exemptions available for local securities offerings. The amended Rule 147 and new Rule 147A are largely identical, except for a few distinct differences.
- [Securities Straight Talk Vol. 2: Out With the Old (Rule 505), In With the New (Rule 504) ](https://velawood.com/securities-straight-talk-vol-2-out-with-the-old-rule-505-in-with-the-new-rule-504/) - The SEC released its final ruling that amends Rule 504 and repeals Rule 505, altering Reg D as we know it. In a nutshell, the SEC has combined the best of Rule 504 (unlimited investors, no accredited investor requirement, no burdensome disclosures) with the best of Rule 505 (a $5,000,000 offering limit).
- [Securities Straight Talk Vol. 1: Securities Laws Matter To Startups (Yes, Yours Too) ](https://velawood.com/securities-straight-talk-securities-laws-matter-to-startups-yes-yours-too/) - So, what exactly is a security, and how does it relate to my startup? In this blog series, we will provide the straight talk on federal and state securities laws to help you navigate the web of regulation.
- [The Name, Image, and Likeness Legal and NCAA Regulatory Landscape](https://velawood.com/the-ncaa-name-image-and-likeness-legal-landscape/) - The purpose of this article is to summarize the name, image, and likeness legal landscape, and the rights athletes would have to commercialize their right of publicity depending on what is ultimately legislated.
- [NAIA Passes Name, Image, and Likeness Legislation](https://velawood.com/naia-passes-name-image-and-likeness-legislation/) - As college athletics awaits the NCAA’s proposed modifications to its name, image, and likeness legislation, the NAIA has become the first intercollegiate athletics governing body to pass legislation permitting athletes compensation for the use of their name, image, and likeness. The legislation allows NAIA athletes to receive compensation for the use of the athlete’s name,
- [Add-On Acquisitions in Lower Middle Market Private Equity](https://velawood.com/add-on-acquisitions-in-lower-middle-market-private-equity/) - While the second quarter of 2020 continued a COVID-propelled downward trend in M&A deal activity, there was a sharp increase in the proportion of sponsor-backed “add-on” acquisitions relative to overall deal volume.
- [Don’t Have Enough Authorized Shares? There’s A Fix For That](https://velawood.com/dont-have-enough-authorized-shares-theres-a-fix-for-that/) - Last September, the Texas legislature ratified Subchapter R, giving Texas for-profit corporations a statutory device for ratifying what were once considered void or voidable corporate acts or issuances of company shares. The new legislation applies to well-established and newly formed corporations alike, but can be particularly helpful for startups who may have accidentally issued more
- [Understanding The New Post-Money Safe](https://velawood.com/understanding-the-new-post-money-safe/) - While Y Combinator's new Post-Money SAFE did simplify the process for calculating early-stage equity, it may become problematic under two scenarios.
- [Five Things to Consider Before Starting Your DFS Company](https://velawood.com/five-things-to-consider-before-starting-your-dfs-company/) - Have a great idea for the next big thing in fantasy sports? There are a few things you should know before diving in head-first.
- [Privacy Policies: Why Having One Is Crucial For Your Company](https://velawood.com/privacy-policies-why-having-one-is-crucial-for-your-company/) - To maintain compliance with various state and federal laws, it is important that a company keeps records on how it collects, processes, uses, and shares personal information.
- [Don't Default To A General Partnership](https://velawood.com/avoid-partnership-perils-spell-it-out-up-front/) - Clients approach us all the time with issues associated to their small business partnerships. Problems arise such as business partners making bad business decisions, running up debts, mismanaging money or even trying to hide income from the partnership…you’d be really surprised what goes on out there. We will ask, “Why did you decide to operate
- [The Company Agreement Explained: Why Do I Need A Company Agreement If I Have A Certificate Of Formation?](https://velawood.com/the-company-agreement-explained-why-do-i-need-a-company-agreement-if-i-have-a-certificate-of-formation/) - Why do I need a Company Agreement if I have a Certificate of Formation?” To answer the question directly, the difference lies in the purpose of the two documents.
- [Drafting LLC Company Agreements: What Is A Capital Contribution?](https://velawood.com/drafting-llc-company-agreements-what-is-a-capital-contribution/) - Explanation of capital contribution as it relates to Limited liability companies.
- [The Company Agreement Explained: What Are Classes Of Members?](https://velawood.com/the-company-agreement-explained-what-are-classes-of-members/) - Differentiating between different classes of membership in you Company Agreement.
- [Drafting LLC Company Agreements: Simple Majority v. Super Majority](https://velawood.com/drafting-llc-company-agreements-simple-majority-v-super-majority/) - Our previous blog outlined the differences between and the advantages and disadvantages of a member-managed LLC and a manager-managed LLC. It only makes sense to now discuss how a business decision is made by the member(s) of the LLC. Section 101.354 of the Texas Business Organizations Code (TBOC) provides that “each governing person, member, or
- [The Company Agreement Explained: What Are Fundamental Business Transactions & Why Are They Important?](https://velawood.com/the-company-agreement-explained-what-are-fundamental-business-transactions-and-why-are-they-important/) - Members and managers of an LLC should be aware of what a “fundamental business transaction” is and should take special consideration as to what consent is required for such a decision.
- [The Company Agreement Explained: Meetings Of Managers & Members](https://velawood.com/the-company-agreement-explained-meetings-of-the-managers-and-members/) - This blog will give you an overview on what the Texas Business Organizations Code (“TBOC”) says about meetings of the Managers and Members and the meeting provisions that aren’t provided for in the TBOC that you may want to consider adding to your company agreement.
- [The Company Agreement Explained: Types Of Decisions Made By Managers & Members](https://velawood.com/the-company-agreement-explained-types-of-decisions-made-by-managers-and-members/) - This blog discusses how the type of business conducted and decisions made during manager meetings may be different than decisions made at member meetings.
- [The Company Agreement Explained: Involuntary Transfers v. Voluntary Transfers](https://velawood.com/the-company-agreement-explained-involuntary-transfers-v-voluntary-transfers/) - What happens when members of LLCs die, get divorced, want to sell their interest to another member or third party? Learn the difference between voluntary and involuntary transfers.
- [The Company Agreement Explained: Confidential Information & Non-Competes](https://velawood.com/the-company-agreement-explained-confidential-information-and-non-compete/) - Most entrepreneurs and small business owners are familiar with confidentiality and non-compete agreements because, well, they want others to gain interest in their product or service, but they don’t want the recipient of the disclosed information to turn around and steal their idea or any other intellectual property related to the business. This same idea
- [B-Corps v. Public Benefit Corporations](https://velawood.com/csr-bcorps-public-benefit-corporations/) - One of the many inside jokes at Vela Wood is that Kevin is a Capitalist, while I’m a Socialist (bleeding heart and all). Kevin usually busts out some form of this joke at company gatherings when I’m showing pictures of my family marching at a climate change rally, discussing the historical impacts of colonialism upon Africa
- [Maine is Latest State to Legalize Daily Fantasy Sports](https://velawood.com/main-is-latest-state-to-legalize-daily-fantasy-sports/) - Maine On August 2nd, Maine joined four other states to become the fifth this year to legalize daily fantasy sports. Fifteen states currently have DFS laws on the books that allow for legal play. Maine’s victory was narrowly won—Governor Paul LePage has previously lobbied against relaxing the state’s gambling laws, and lawmakers worried that he
- [New Jersey DFS Update](https://velawood.com/new-jersey-dfs-update/) - New Jersey became the 16th state to enact fantasy sports legislation when Governor Chris Christie approved bill A3532 on Thursday. The law contains standard tax and regulatory provisions. The 10.5% tax on gross revenue will generate huge profits for the state’s government, but is within the range of taxes imposed by most other states. The
- [Business Judgment Rule: Having Poor Business Judgment Isn’t A Tort](https://velawood.com/business-judgment-rule-having-poor-business-judgment-isnt-a-tort/) - The rationale behind the rule is to shield those individuals that owe fiduciary duties to a Company (directors, officers, executives) from fear of a lawsuit each time they make a decision that in hindsight might end up being bad for the company.
- [Learning From "No"](https://velawood.com/learning-from-no-blog/) - Hearing 'no' from an investor doesn't end the conversation; it pivots the conversation. If you’ve ever embarked on a round of funding, even a simple friends and family round, chances are you’ve heard some form of “no” more than you’d like.
- [The Oddish Intersection of Property Rights and Augmented Reality](https://velawood.com/the-oddish-intersection-of-property-rights-and-augmented-reality-blog1/) - Pokémon Go, and similar apps, have now forced us to consider a new right that may be tied to property: your virtual rights.
- [DFS Legislative Development Summary: Clarification of Legal Status Opens Doors for Daily Contests, but Regulations Set Roadblocks for Smaller Operators](https://velawood.com/dfs-legislative-development-summary-legal-status-opens-doors-daily-contests-regulations-set-roadblocks-smaller-operators/) - With opinions from attorney generals and legislative developments arriving daily, staying on top of the shifting legal environments of every state can be a chore for any fantasy sports operator. But when you’re trying to get your fantasy sports startup off the ground, keeping track of so much movement in so many places can be downright
- [Hiring A Developer? Get It In Writing And Signed First](https://velawood.com/hiring-a-developer-in-writing-and-signed/) - Here’s an unfortunate, but common call we get from clients at VW each week: Client: “Hi, we're having a problem with our web developer. They started the project and took our initial payment, but are now way behind schedule and have increased the project estimate 3X.” VW Attorney: “Okay, why don't you let me take
- [The 50-50 Equity Split(Up)](https://velawood.com/50-50-equity-split/) - My parents are starting a business together. See, my mom runs an organic, all natural beauty salon in Upstate New York. Part of the business that she has developed over the years is using henna as an eco-friendly alternative to chemical hair dyes. She’s good at it. So she decided to start importing henna from
- [The Four External Pillars of a Small Business](https://velawood.com/the-four-external-pillars-of-a-small-business/) - Starting a business is hard work. There are lots of pitfalls to navigate, and some are impossible to avoid. But it’s not as hard to get help as you may think. Every small business (and this includes startups) should have four professionals by its side to help guide the business: 1) a CPA, 2) an attorney,
- [Massachusetts Attorney General Says Daily Fantasy Sports Legal; State Lotteries Emerge As Potential New Rival](https://velawood.com/massachusetts-attorney-general-says-daily-fantasy-sports-legal-state-lotteries-emerge-potential-new-rival/) - After reviewing the legal status of daily fantasy sports, Massachusetts Attorney General Maura Healey announced last week that no federal or state laws prohibit daily fantasy sports in Massachusetts. Although Healey’s office has not yet released a formal opinion, fantasy sports sites can continue to provide services and customers who participate in DFS contests and
- [Liquidation Preferences & Convertible Notes](https://velawood.com/liquidation-preferences-and-convertible-notes/) - It’s no secret that entrepreneur-turned-VC, Mark Suster, generally isn’t a fan of convertible notes. Here at Vela Wood, we’re fairly pro convertible notes when used responsibly in certain situations. Despite Suster’s dislike of convertible notes, he still looks out for entrepreneurs who insist on using them. To that end, a few weeks ago, Suster wrote
- [Client Spotlight: Q&A with Matt Alexander of Edition Collective](https://velawood.com/client-spotlight-qa-matt-alexander-need-foremost-edition/) - Matt Alexander, founder of Need and Foremost, has been all the rage lately as he was recently featured in D Magazine as an emerging "titan of industry." Matt talks with VW during our Q&A session to offer some of his best advice for startup success based on his experiences. What made you want to
- [The Repeal of PASPA](https://velawood.com/the-repeal-of-paspa/) - On Monday the Supreme Court struck down the Professional and Amateur Sports Protection Act of 1992 (“PASPA”), the federal ban on sports betting. In a 6-3 ruling, SCOTUS held that PASPA unconstitutionally commandeers state legislatures by dictating what they “may and may not do.” In other words, Congress can’t require that states enact, or refrain
- [Are You Ready To Talk To Angel Investors?](https://velawood.com/are-you-ready-to-talk-to-angel-investors/) - I get a lot of requests from prospective clients who either a) want to know where they can go to look for money, or b) ask me to connect them to angel investors. My first response is always "how much have you put in?" I remember reading a VC guy's blog a few years ago
- [Contemporaneous Crowdfunding](https://velawood.com/contemporaneous-crowdfunding/) - A client who recently launched an intrastate, equity-based*, crowdfunding campaign in Texas called me a few weeks ago with an interesting question: “Can we do an accredited investor, interstate, equity-based crowdfunding campaign at the same time?” After some research, I called the client back to give him the most lawyerly answer possible: “it depends.” First, let
- [Succession Planning: A Critical Part Of Management & A Business’s Ongoing Success](https://velawood.com/succession-planning-a-critical-part-of-management-and-a-businesss-ongoing-success/) - “How much do you weigh?” There are some questions so personal and invasive social mores dictate that they should never be asked. Well, almost never asked. A colleague remarking about any extra poundage I was carrying as a result of the holidays is always off limits. A doctor remarking about a rapid 50 lbs weight
- [Other Deeds In Texas](https://velawood.com/other-deeds-in-texas/) - Previously, we discussed the four major deeds in Texas: general warranty deeds, special warranty deeds, no warranty deeds and quitclaims. While these are the most common deeds, there are other not so common deeds in Texas that are used to convey ownership.
- [Four Major Deeds In Texas](https://velawood.com/four-major-deeds-in-texas/) - The four major deeds in Texas are general warranty deeds, special warranty deeds, no warranty deeds and quitclaims.
- [Deeds In Texas](https://velawood.com/deeds-in-texas/) - A deed is by far one of the most important documents in any Texas real estate transaction.
- [SEC Releases Long-Standing Proposed Crowdfunding Rules](https://velawood.com/sec-releases-long-standing-proposed-crowdfunding-rules/) - Finally! Ten months after they were supposed to be released, the SEC released the proposed crowdfunding rules to the general public on October 23, 2013. The proposed rules are currently in the middle of the 90-day comment period, and as a result, investors will likely have to wait until the middle of 2014 to participate
- [How To Resolve Decisions In Deadlock](https://velawood.com/the-dreaded-deadlock/) - Several realistic solutions to solving disputes between co-founders.
- [Why Your Primary Worry Should Be Execution, Not Confidentiality](https://velawood.com/why-your-only-worry-should-be-execution/) - Execution should be the real focus of startup companies, not the competition.
- [Who's Your GoDaddy? (Company Domain Name Ownership)](https://velawood.com/whos-your-godaddy-company-domain-ownership/) - How to easily avoid having your domain held hostage by an angry former employee, founder or design company.
- [What Is A Registered Agent?](https://velawood.com/what-is-a-registered-agent/) - Some of the most common questions we get from our startup and small business clients are: What is a registered agent? What do they do? Why do I need one? Hopefully, this brief blog will help answer some of those questions. A registered agent serves as the official “contact person” for a business. A business
- [Presenting To Investors: Conciseness = Clarity](https://velawood.com/presenting-to-investors-conciseness-clarity/) - "Confident writers have the courage to speak plainly; to let their thoughts shine rather than their vocabulary." – Ralph Keye While it might not seem like it at first glance, pitching an idea is, in some ways, just like writing...and you need to let your thoughts shine. When you go out and present to investors,
- [Texas Series LLCs & Your Due On Sale Clause](https://velawood.com/texas-series-llcs-and-your-due-on-sale-clause/) - As I have discussed in my earlier blogs on Texas Series LLCs, series LLCs are a powerful and efficient asset protection tool and are rapidly becoming the preferred entity vehicle for real estate investors. However, because they are still in their infancy in Texas, series LLCs can often raise questions that have yet to be
- [The Difference Between A Copyright, Patent & Trademark](https://velawood.com/whats-the-difference-between-a-copyright-a-patent-and-a-trademark/) - Copyrights, Patents, and Trademarks - oh my! Intellectual property (and we're not talking about a smart piece of real estate) consists of copyrights, trademarks, and patents. There is a lot of confusion as to the application and distinction of each. Do you have a novel idea? Are you creating a novel? A logo for your
- [What Is A DBA (Assumed Name) & When Do I Need One?](https://velawood.com/what-is-a-dba-assumed-name-and-when-do-i-need-one/) - Just what is a DBA? A DBA (Doing Business As) is an official filing you make with either the local or statewide government offices for registering the name under which you will be conducting business. In Texas, we generally refer to DBA registration as filing an Assumed Name Certificate. Any type of entity structure can
- [Answering Questions About Texas Series LLCs](https://velawood.com/answering-questions-about-texas-series-llcs/) - As we wrote a few months ago, Texas Series LLCs are rapidly becoming the preferred investment vehicle entity in Texas. As I've been forming Series LLCs for clients, I keep getting the same questions, so I thought it would be helpful to answer a few of them here. How do I name them? While the
- [Employment Contract Considerations](https://velawood.com/employment-contract-considerations-for-small-businesses-and-startups/) - You know the saying, "An ounce of prevention is worth a pound of cure."? Well, that axiom most certainly applies to small businesses. While many today do not enter into written employment agreements with their employees, it would certainly be in any small business’s best interest to do so. Small businesses that do not use employment
- [Does Your Idea Really Need An NDA?](https://velawood.com/does-your-idea-really-need-an-nda/) - If you have a good idea, start pursuing it. If you have the skills to build the app, or construct the model, or draft the sketches and outlines, then do it.
- [The Texas Series LLC: A Great Tool For Investors](https://velawood.com/the-texas-series-llc-a-great-tool-for-investors/) - I’ve had several clients ask me recently about Texas Series LLCs. What are they? What are the advantages of them? How can they be formed? Hopefully I can answer a few of those questions below. Of course, I always recommend to clients and prospective clients that they consult with an attorney prior to forming an
- [Oooh, Baby, Baby – A Beginner’s Guide to Maternity Leave](https://velawood.com/oooh-baby-baby-beginners-guide-maternity-leave/) - “Are you pregnant?” Add this to the list of questions that all but a precious few may reasonably ask. Since I’m a lawyer, I feel entitled…to ask in order to clear up some common misconceptions about workplace protection and paid leave for moms-to-be and any spouse or significant other who is considering taking time off for
- [Mo' Founders Mo' Problems - Another Vote For Well Drafted Partnership Agreements](https://velawood.com/mo-founders-mo-problems-another-vote-for-well-drafted-partnership-agreements/) - Note, the advice below is entity type agnostic. Member Agreements, Company Agreements, and Founder Agreements are included in the context of partners agreements. Founder disputes are unavoidable - and the more founders, the higher the likelihood for disagreements. Every startup will encounter business related obstacles (and a reluctance to follow the status quo was likely one
- [How Do I Name My Texas Series LLC?](https://velawood.com/how-do-i-name-my-texas-series-llc/) - A question that we frequently get from our Series LLC clients is, "How do I name my Texas Series LLC?" This is really two questions in one - as the parent and cells within the series will each have different names. Thus, there is a name for the parent, and then one for the cell(s).
- [Independent Contractor Agreements Don't Mean Anything](https://velawood.com/independent-contractor-agreements-worth-the-paper-theyre-printed-on/) - On Valentine’s Day in either first or second grade, Teresa Holting handed me a little card with my name hastily written on the envelope. Inside the envelope, and on the front cover of the card, were a couple of anthropomorphic almonds (or maybe pistachios) having a hell of time. A speech balloon rose out of
- [VW Venture Deals Year in Review 2016](https://velawood.com/vw-venture-deals-year-in-review-2016/) - In December of 2015, we released a three-year audit of early stage venture deals facilitated by VW and felt that the data was an indicator of early-stage financing trends and the good health of the venture industry in DFW. We've just completed our 2016 audit, and the results are encouraging, if not impressive. First of all,
- [Protecting Your Intellectual Property](https://velawood.com/protecting-your-intellectual-property/) - Protecting your intellectual property is a critical issue for every small business owner, whether you're a technology startup, building a services business, or launching a new restaurant concept. Kevin spoke to a group of small business owners at a Dallas SCORE event on these issues, and we wanted to share the presentation and resources with

## Pages

- [We're <span class="orange">Here</span> to Help](https://velawood.com/) - VelaWood is a boutique full service law firm with a local feel and a global impact. We focus our practice in the areas of M&A, Private Equity, Fund Representation, and Venture Transactions.
- [Global Reach](https://velawood.com/global-reach/)
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- [Selected Offering Exemptions](https://velawood.com/selected-offering-exemptions/) - Quick Guide to Offering Exemptions Click here to view and download this easy to navigate PDF identifying some of the requirements, limitations, and advantages of a few federal exemptions available to small businesses raising capital. Updated February 2023. Please note that the information below is informative only in nature, is subject to change, and shall
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- [Contact Us](https://velawood.com/contact/) - Vela Wood Staley Young, or Vela Wood, is a boutique corporate law firm with a local feel and a global impact. We focus our practice in the areas of M&A, Sports & Gaming, Venture Capital, and Corporate Transactions. We pride ourselves in building real relationships with our clients and partnering with them for the long-haul.
- [VW Signals](https://velawood.com/signals/) - Most published venture data often reflect only a portion of the market. These datasets are skewed toward the coasts, where reporting is more consistent and venture capital is more concentrated. That means early-stage trends from the middle of the country often go underreported or unnoticed. VW Signals is Vela Wood’s answer to that gap. Based in
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- [LSAT Prep Course Scholarship](https://velawood.com/lsat-prep-course-scholarship/) - We’re thrilled by the response to our partnership with Kaplan and all scholarships for this opportunity have now been awarded. While this program is currently closed, we are exploring opportunities to renew it in the future. Please stay connected with us on social media for updates and announcements about upcoming initiatives. Thank you for your
- [Order with Purpose](https://velawood.com/order-with-purpose/) - On the last Thursday of every month, Vela Wood reimburses each employee to order lunch from a minority owned restaurant. This gives employees an opportunity to give back to the community as well as experience delicious local cuisine. If you or someone you know has a minority owned restaurant in the Austin or Dallas area,
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- [VW Intake](https://velawood.com/vw-intake/) - Our Process Please note that initial consultations are conducted by phone. This consultation is free of charge and typically lasts between 15 and 30 minutes. Unfortunately, we cannot meet with potential clients in person because we reserve in-person meetings for existing clients. If you would like to engage our firm after your consultation, we ask
- [VW Early Stage Lifecycle](https://velawood.com/vw-early-stage-lifecycle/) - Welcome to VW's Startup Lifecycle Infographic! The purpose of this infographic is to help you identify where your startup is, or what should be happening at different stages. Note that this is not an exact science, as every startup is different, and different places use different terms...but we like ours the best! Moreover, meeting one
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- [VW Startup Community Survey](https://velawood.com/client-survey/) - Vela Wood represents hundreds of startup companies and we would like to help leverage the combined knowledge of our network. Our annual VW Startup Community Survey will be used to share the best products, software, and services for startups. Please fill out the information below by September 15. We expect this to take less than 5 minutes.
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- [This is Where Startups Get Started](https://velawood.com/startup-central/)
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## Attorneys

- [Janae Wilson](https://velawood.com/attorney/janae-wilson/) - Prior to joining Vela Wood, Janae was an associate at Vinson & Elkins LLP’s Dallas office in the Corporate practice (formerly known as MACM). During her time at Vinson & Elkins, she assisted with public and private mergers & acquisitions, securities offerings, ’34 Act filings, representations & warranties insurance matters, and general corporate governance. Janae
- [Matt C. Wood](https://velawood.com/attorney/matt-c-wood/) - Matt C. Wood is a Partner at Vela Wood. He focuses on complex litigation and high-stakes appeals.
- [Radney Wood](https://velawood.com/attorney/radney-wood/) - Radney Wood is a named partner at Vela Wood and manages the Austin office. Radney focuses his practice on representing emerging companies, venture financing, venture capital funds, and gaming related matters, with an expertise in fantasy sports law. Radney is a former litigation and an active pro bono advocate for asylum seekers and has successfully represented several refugees in obtaining asylum.
- [Jenny Young](https://velawood.com/attorney/jenny-young/) - Jenny is a partner at Vela Wood. She focuses her practice in employment law and general corporate representation.
- [Kevin Vela](https://velawood.com/attorney/kevin-vela/) - Kevin is the managing partner at Vela Wood. He focuses his practice in the areas of venture financing, M&A, fund representation, and gaming law.
- [Candace Groth](https://velawood.com/attorney/candace-groth/) - Candace Groth is a senior attorney at Vela Wood. She focuses on mergers & acquisitions and complex LLC matters.
- [Gregory Smith](https://velawood.com/attorney/gregory-smith/) - Gregory Smith is Senior Counsel for Vela Wood, with a practice focusing on real estate, corporate law and mergers and acquisitions. With a firm background in energy law including the renewables sector, Gregory has a substantial transactional knowledge foundation. Gregory is a 2020 and 2021 Super Lawyers Rising Star and a Texas Bar Foundation Life Fellow.
- [Cleve Burke](https://velawood.com/attorney/cleve-burke/) - Cleve Burke is a Partner at Vela Wood, where he serves as Chair of the firm’s litigation practice. Cleve focuses his practice on civil litigation, bankruptcy, and appeals.
- [G. Karthik Srinivasan](https://velawood.com/attorney/g-karthik-srinivasan/) - Karthik Srinivasan is a Senior Attorney at Vela Wood. He focuses his practice on complex civil and commercial litigation.
- [Mark Willey](https://velawood.com/attorney/mark-willey/) - Mark Willey is an Attorney at Vela Wood. He focuses his practice in the areas of startups and venture, fund representation, M&A, commercial real estate transactions, and general corporate matters.
- [Tyler Beas](https://velawood.com/attorney/tyler-beas/) - Tyler Beas is a Senior Attorney at Vela Wood. He focuses his practice on intellectual property counseling and litigation in connection with trademark, copyright, trade dress law, domain name disputes, social media, name, image, and likeness (NIL), and advertising practices.
- [Trevor LaBarge](https://velawood.com/attorney/trevor-labarge/) - Trevor LaBarge is a senior attorney at Vela Wood. He focuses his practice in the areas of mergers & acquisitions, private equity, emerging company & venture capital, venture financing, and sports law.
- [Mattison Raiford Spaulding](https://velawood.com/attorney/mattison-raiford/) - Mattison Raiford is an attorney at Vela Wood. She represents clients in general business matters, with a focus on venture capital and mergers and acquisitions.
- [Bronté Story](https://velawood.com/attorney/bronte-story/) - Bronté Story is an attorney at Vela Wood. She focuses her practice on commercial contract matters with an additional focus in intellectual property law, entertainment law, employment law, and TABC and administrative regulatory compliance matters.
- [Blake Hart](https://velawood.com/attorney/blake-hart/) - Blake is a senior attorney at Vela Wood. She focuses her practice on contract drafting, review, and negotiation on behalf of sports and entertainment individuals and enterprises.
- [Alyson Rotunda Rubio](https://velawood.com/attorney/alyson-rotunda-rubio/) - Alyson Rubio is a Partner at Vela Wood. Alyson's experience includes representing clients ranging from startups to public companies in corporate and transactional matters.
- [Carr Staley](https://velawood.com/attorney/carr-staley/) - Carr is a partner at Vela Wood. He focuses his practice in the areas of mergers and acquisitions and real estate transactions and investment activities.
- [Denise Rizo-Patron](https://velawood.com/attorney/denise-rizo-patron/) - Prior to re-joining Vela Wood, Denise served as Associate General Counsel at 8VC in Austin, where she led and managed venture capital investments across all stages—from seed to late-stage growth. In that role, she negotiated and structured complex financing transactions, oversaw legal and regulatory due diligence, and coordinated deal execution alongside investment professionals and outside
- [Stefanie Scott Shah](https://velawood.com/attorney/stefanie-scott-shah/) - Stefanie Scott Shah is Senior of Counsel at Vela Wood. She focuses her practice in the areas of employment law and intellectual property law.
- [Andrew Visnovsky](https://velawood.com/attorney/andrew-visnovsky/) - Andrew Visnovsky is Senior of Counsel at Vela Wood. His practice is focused on the sports business, advising players, agents, clubs, and governing bodies on matters related to strategic regulatory advice, player and business transactions, and disputes.
- [Rebecca Carpenter](https://velawood.com/attorney/rebecca-carpenter/) - Rebecca Carpenter is Senior Counsel at Vela Wood. She focuses her practice on advising private fund and venture capital fund managers on a wide variety of business manners including formation, analysis of investments, and securities and regulatory matters.
- [Daniel Yu](https://velawood.com/attorney/daniel-yu/) - Daniel graduated from Baylor University School of Law in Waco, Texas. While in law school, Daniel completed the Business Planning Professional Track, was a member of the Baylor Barrister Society, and served as Vice President and co-founder of the Baylor Real Estate Legal Society. He also represented Baylor in the 2021 Duke Transactional Law Competition
- [Austin Powell](https://velawood.com/attorney/austin-powell/) - At Vela Wood, Austin advises founders and early-stage companies on entity formations, venture financings, and securities matters. He also represents investors on fund/SPV formation and portfolio investments. Austin began working at Vela Wood as a Legal Secretary, where he assisted with entity formations, venture financings, and general corporate governance matters. Austin continued to work at
- [Sherwin Faridifar](https://velawood.com/attorney/sherwin-faridifar/) - Prior to joining Vela Wood, Sherwin practiced at Baker Botts L.L.P. for more than a decade. Sherwin graduated with high honors from the University of Texas School of Law in Austin, Texas, where he was a member of the Order of the Coif. While in law school, Sherwin was an Associate Editor on the Texas
- [Brian Kim](https://velawood.com/attorney/brian-kim/) - Brian Kim is a Senior Attorney at Vela Wood. He focuses his practice in the areas of M&A, venture financing and general corporate transactions.
- [Jennifer Steiger](https://velawood.com/attorney/jennifer-steiger/) - Jennifer Steiger is a senior attorney at Vela Wood. She advises clients on a variety of corporate matters, including investments, mergers, acquisitions, dispositions, and other private company transactions. Jennifer takes a pragmatic approach to her work and stays focused on her clients’ objectives.
- [Mark Esserman](https://velawood.com/attorney/mark-esserman/) - Prior to joining Vela Wood, Mark worked as an associate at Haynes and Boone as an investment funds attorney in their Investment Management practice group. During his time at Haynes and Boone, Mark worked with investment managers to structure, launch, and operate private funds across a range of asset classes. Mark is deeply committed to
- [Steven Wood](https://velawood.com/attorney/steven-wood/) - Steven Wood is a Senior Attorney at Vela Wood. He focuses his practice on outer space law, patents and intellectual property, licensing and other technology centered transactions.
- [Andrew Lin](https://velawood.com/attorney/andrew-lin/) - Andrew Lin graduated from NYU School of Law. Prior to law school, Andrew received his B.S. in Biochemistry from the University of Texas at Austin. At Vela Wood, Andrew is the Director of Technology as well as a Senior Attorney. As the Director of Technology, he handles in-house software development projects, many of which involve
- [Tyson Attaway](https://velawood.com/attorney/tyson-attaway/) - Tyson is a senior attorney at Vela Wood. He focuses his practice in the areas of M&A, venture capital, and private equity.
- [Kaitlyn Fletcher Ward](https://velawood.com/attorney/kaitlyn-fletcher-ward/) - Kaitlyn Fletcher Ward graduated with honors from the University of Houston Law Center in Houston, Texas. While in law school, Kaitlyn was a member of the Houston Business and Tax Law Journal. Prior to law school, Kaitlyn graduated magna cum laude from Texas Tech University with a B.A. in Energy Commerce. During law school, Kaitlyn
- [Jordan Doyle](https://velawood.com/attorney/jordan-doyle/) - Prior to joining Vela Wood, Jordan worked as an associate at Katten Muchin Rosenman LLP and Jones Day in Dallas, Texas, where she represented public and private companies in high-stakes litigation and government investigations. Jordan graduated with honors from the University of Texas School of Law in Austin, Texas. Prior to law school, Jordan graduated
- [Jeff Villalobos](https://velawood.com/attorney/jeff-villalobos/) - Jeff is a senior attorney at Vela Wood. He focuses his practice in the areas of intellectual property, technology commercialization, privacy, advertising, and corporate transactional matters.
- [Bobby Gojuangco](https://velawood.com/attorney/bobby-gojuangco/) - Bobby Gojuangco is an attorney at Vela Wood. He focuses his practice in the areas of venture financing, M&A, and taxation.
- [Ashley Sykora](https://velawood.com/attorney/ashley-sykora/) - Alexus Esquibel is an attorney at Vela Wood. She represents clients in general business matters, with a focus on venture capital financing and mergers & acquisitions.
- [Allison Hopkins](https://velawood.com/attorney/allison-hopkins/) - Allison Hopkins is an attorney at Vela Wood. She practices in various areas of corporate law, with a focus on venture financing, M&A, and corporate governance.
- [Zach Jones](https://velawood.com/attorney/zach-jones/) - Zach is a partner at Vela Wood. He focuses his practice on tax disputes with government authorities and complicated business transactions.
- [Chi Reece](https://velawood.com/attorney/chi-reece/) - Chi Reece is a partner at Vela Wood. She focuses her practice in the areas of business and commercial transactions, real estate transactions, and trademarks.
- [Neil Fogel](https://velawood.com/attorney/neil-fogel/) - Neil Fogel is Senior of Counsel at Vela Wood. He focuses his practice on advising companies in negotiating, structuring, and drafting a variety of corporate and commercial transactions, with a particular emphasis on commercial service arrangements, technology/software, intellectual property and licensing, SLAs, and outsourcing matters.
- [Peter Hammon](https://velawood.com/attorney/peter-hammon/) - Peter Hammon is Senior of Counsel at Vela Wood, focused on the areas of sports wagering, land-based and online gambling, and technology.

## Practice Areas

- [Litigation & Bankruptcy](https://velawood.com/practice-area/litigation-bankruptcy/) - The Vela Wood litigation and dispute resolution practice includes commercial litigation, alternative dispute resolution, bankruptcy, and receivership. Our attorneys have represented clients in a variety of legal proceedings before state and federal courts at both the trial and appellate levels as well as in arbitration before the American Arbitration Association (AAA). We represent commercial clients
- [Fantasy Sports & Gaming Law](https://velawood.com/practice-area/fantasy-sports-and-gaming-law/) - From full season fantasy leagues to daily fantasy sports to eight liners to amusement machines, we've got you covered.
- [Sports Law](https://velawood.com/practice-area/sports-law/) - We have proudly built a broad sports law practice to support the business of sports. We are listed in Hackney Publications’ “100 Law Firms with Sports Law Practices You Need to Know About.” We help large and small enterprises across sports, including domestic and international soccer clients, NFL, MLS, and NBA teams, e-sports, fantasy, and gaming
- [Startups & Venture](https://velawood.com/practice-area/startups-venture/) - VW represents hundreds of startups all over the world. Our vision and goal is to be the best startup firm in Texas, plain and simple.
- [Mergers & Acquisitions](https://velawood.com/practice-area/mergers-acquisitions/) - Need help restructuring your entity, cleaning up your cap table, or getting your corporate governance in order? It's not as hard as it seems. Let us walk you through it.
- [Fund Representation](https://velawood.com/practice-area/fund-representation/) - At Vela Wood, we’re pleased to offer our private equity clients a full suite of services. Our attorneys can help you navigate the complex regulatory environment surrounding fund formation, offering documentation, investor sourcing, capital deployment, and exit strategies. Vela Wood draws on the firm’s startup, corporate M&A, and real estate practices, as well as its
- [Employment](https://velawood.com/practice-area/employment/) - At Vela Wood, we understand that proper management of your workforce is essential to the success of your business. We also understand that employment law is complex, nuanced, and oftentimes leaves employers confused about how to properly handle both day-to-day and complex situations that arise with employees, contractors, and government agencies. Our attorneys are here
- [Intellectual Property](https://velawood.com/practice-area/trademarks/) - Need help protecting your brand, slogan, or logo? Click here to get started.
- [Commercial Real Estate Transactions](https://velawood.com/practice-area/real-estate-law/) - Vela Wood has a wealth of experience representing all parties in real estate transactions, including, buyers, sellers, lenders, landlords and investors.
- [In-House Support](https://velawood.com/practice-area/sports-law/in-house-support/) - At Vela Wood, we help a wide range of sports enterprises, including organizations in the NFL, NBA, and MLS teams, governing bodies, and universities, to support their in-house legal teams and other business units with drafting and negotiating various types of commercial agreements, providing legal and compliance counsel on promotional, ticketing, and marketing related matters,
- [International Sports](https://velawood.com/practice-area/sports-law/international-sports/) - Vela Wood has a growing international sports practice, which is focused on representing national associations, regional confederations and soccer (football) officials in proceedings before various international sports entities, including at the international federation level, as well as in arbitration before the Court of Arbitration for Sport. We routinely advise clients on matters related to FIFA’s
- [Sports Ventures](https://velawood.com/practice-area/sports-law/sports-ventures/) - Our current client roster includes sports related companies focused on player training tools, data analytics, artificial intelligence, electronics for athletes, daily fantasy sports, and gaming. We have also worked with current and retired athletes on making wise investment and business decisions, which can be difficult, especially with the unique influences and pressures that athletes typically

## Locations

- [Dallas](https://velawood.com/location/dallas/) - We're proud to be Dallas-born! In December of 2008, we launched our firm in a strip mall between a bank and a doggy day care. We’ve come a long way from those humble beginnings, and we've made our home in the heart of Dallas, on the 8th floor of Mockingbird Station. No longer a startup,
- [Austin](https://velawood.com/location/austin/) - 600 Congress Ave., Suite 1400, Austin, TX 78701

## Glossary Terms

- [Business Judgment Rule](https://velawood.com/glossary-term/business-judgment-rule/) - The Business Judgment Rule is a legal doctrine that protects directors and officers from personal liability for business decisions made in good faith. Courts will generally defer to the decisions of a company's leadership so long as those decisions were made in good faith, without a conflict of interest, and with the reasonable belief that
- [Safe](https://velawood.com/glossary-term/safe/) - Safe is an acronym for "simple agreement for future equity," which is an alternative to the issuance of convertible debt.
- [228 Notice](https://velawood.com/glossary-term/venture-glossary-228-notice/) - A 228 Notice refers to a written notice given to stockholders under Section 228 of the Delaware General Corporation Law (DGCL) when corporate actions are taken by written consent instead of a stockholder meeting.
- [B Corporation](https://velawood.com/glossary-term/b-corporation/) - B Corporations are for-profit organizations that use their business to address social and environmental problems. They are not separate legal entities, nor do they have different tax treatment from the basic corporation. Rather, they must comply with extensive certification requirements put in place by the non-profit organization B Lab. After obtaining certification, "B" businesses can
- [C Corporation (C Corp)](https://velawood.com/glossary-term/c-corporation-c-corp/) - A C Corporation is a legal entity that allows for limited liability. C Corporations are legally considered separate entities from their owners. Income is taxed at the corporate level and is taxed again when it is distributed to owners, potentially resulting in double taxation. Despite the double taxation, C Corporations are the preferred entity for
- [S Corporation](https://velawood.com/glossary-term/s-corporation/) - An S Corporation is a form of corporation that meets the IRS requirements to elect pass through taxation. The corporation can pass income directly to shareholders. S corporations can be very valuable in limited instances. They are not typically recommended for startups, but may make sense for some small businesses (particularly services businesses). Please consult
- [Participating Preferred Stock](https://velawood.com/glossary-term/participating-preferred-stock/) - Participating Preferred Stock is preferred stock that receives a liquidation preference, or a priority right upon the company's liquidation (exit). Contrast this with non-participating preferred stock, which receives liquidation disbursements equal to its liquidation preference and does not receive additional liquidation disbursements in equal proportion to its ownership percentage. Here's a quick example:
- [Non-Participating](https://velawood.com/glossary-term/non-participating/) - Non-Participating, in regard to preferred stock, is preferred stock that only receives liquidation disbursements equal to its liquidation preference and does not receive additional liquidation disbursements in equal proportion to its ownership percentage. Contrast this with participating preferred stock, which receives 1x the purchase price plus its pro rata percentage of the proceeds. Participating preferred
- [Investment Adviser](https://velawood.com/glossary-term/investment-advisers/) - An Investment Adviser is an individual or entity that is registered to provide investment advice about securities.
- [Right of First Offer (ROFO)](https://velawood.com/glossary-term/right-of-first-offer/) - The Right of First Offer (ROFO) is a contractual obligation by the owner of an asset to negotiate the sale of the asset with the rights holder before offering sale of the asset to any third parties. In the context of startups, this usually gives an investor the right to purchase his or her pro-rata
- [Putative Issuance](https://velawood.com/glossary-term/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 shares in excess of its Authorized Shares. The impact and effect of a Putative Issuance
- [Intellectual Property](https://velawood.com/glossary-term/intellectual-property/) - Intellectual property (IP) refers to creations of the mind, such as inventions, literary and artistic works, designs, symbols, names, and images. IP is protected in varying degrees by state, federal, and international laws. Common examples of IP include patents, trademarks, and copyrights.
- [Qualified Small Business Stock - Section 1202 of Internal Revenue Code](https://velawood.com/glossary-term/section-1202/) - Section 1202 of the Internal Revenue Code provides for beneficial tax treatment for investors who purchase Qualified Small Business Stock (QSBS) in a company. If a stock qualifies as QSBS, investors may exclude up to 100% of the federal capital gains tax associated with the sale of the QSBS, subject to certain limitations. In order
- [409A Valuation](https://velawood.com/glossary-term/409a-valuation/) - Section 409A of the Internal Revenue Code regulates the treatment of non-qualified deferred compensation to service providers for federal income tax purposes. A company must issue stock options at fair market value in order to legitimately benefit from this section of the code and will typically hire a third-party agency to issue a report determining
- [1x](https://velawood.com/glossary-term/1x/) - 1x means "one times original purchase price" in conjunction with a liquidation preference. Liquidation preferences can be participating or non-participating.
- [4 Years with a 1-Year Cliff](https://velawood.com/glossary-term/4-years-with-a-1-year-cliff/) - 4 Years with a 1-Year Cliff is the typical vesting schedule used by startups. A one year cliff means that nothing vests for the first year, but after a year the vesting would catch-up to 12/48, and then the remaining balance would vest over three years (typically 1/36 a month for 36 months).
- [83(b) Election](https://velawood.com/glossary-term/83b-election/) - An 83(b) Election is an election made under the Internal Revenue Code that allows a person receiving shares (or units) under a vesting schedule to recognize income based on the entire value of the shares as of the date of the grant - instead of as the shares vest. Basically, you accelerate the ordinary income
- [Accelerator](https://velawood.com/glossary-term/accelerator/) - An Accelerator is a program whose intent is to "accelerate" the development of startups. Typically an accelerator will last one to three months and aims to provide support to startups through small amounts of seed capital, mentoring, training, and events for a finite period. It is common for an accelerator to receive some equity in
- [Advisory Board](https://velawood.com/glossary-term/advisory-board/) - An Advisory Board is less formal than a startup's board of directors. An advisory board typically consists of people whose experience, knowledge, and influence can benefit the growth and direction of the startup.
- [Angel Financing](https://velawood.com/glossary-term/angel-financing/) - Angel Financing refers to a startup's financing round whereby the investors are angel investors (see Angel Investor). This round typically comes after a Friends and Family round, but before a Series A round. Many Seed and AA rounds are composed of angel investors.
- [Articles of Incorporation (AOI)](https://velawood.com/glossary-term/articles-of-incorporation-aoi/) - Articles of Incorporation (AOI) are what some states, including California, call the primary organization document for a corporation. In Texas, it's called a "Certificate of Formation" and in Delaware it's called a "Certificate of Incorporation." Many people just refer to these docs as a corporation's charter.
- [As-Converted Basis](https://velawood.com/glossary-term/as-converted-basis/) - As-Converted Basis refers to the calculation of securities assuming conversion of all stock.
- [Asset Acquisition](https://velawood.com/glossary-term/asset-acquisition/) - An Asset Acquisition is a transaction whereby an acquirer purchases the assets of the company, rather than the ownership interests.
- [Accelerated Vesting](https://velawood.com/glossary-term/accelerated-vesting/) - Accelerated Vesting is a process whereby a holder of restricted equity has the vesting schedule sped-up, or accelerated, upon the occurrence of certain events, i.e. termination of the holder without cause or a sale of the company.
- [Acceleration Clause](https://velawood.com/glossary-term/acceleration-clause/) - An Acceleration Clause refers to a contractual clause which allows debt owed over time to be "accelerated" so that it is owed immediately. You see this most often in promissory notes, where a default or breach of a provision of the agreement will cause the entire debt obligation to accelerate and become due immediately.
- [Accredited Investor](https://velawood.com/glossary-term/accredited-investor/) - Accredited Investor is defined under the Securities Act of 1933. Anyone (individual or entity) who meets the definition is able to invest in certain private offerings. Simply put, an accredited investor is an individual with a net worth (individually or with a spouse) of at least $1,000,000 exclusive of a primary residence, or who has
- [Acquihire](https://velawood.com/glossary-term/acquihire/) - Acquihire is the acquisition of a company primarily for the talent or employees, and not necessarily the product or service offerings.
- [Advisor Agreement](https://velawood.com/glossary-term/advisor-agreement/) - An Advisor Agreement is a formalized agreement between an entrepreneur and a startup advisor that details and defines the relationship. Advisors typically receive a small amount of equity for their services.
- [Angel Investor](https://velawood.com/glossary-term/angel-investor/) - Angel Investors are individuals who provide seed or startup finance to entrepreneurs. In addition to an investment, angel investors may also provide industry contacts and knowledge.
- [Annual Contract Value (ACV)](https://velawood.com/glossary-term/annual-contract-value-acv/) - Annual Contract Value (ACV) is the value of a contract over a 12-month period. A figure like this is important for internal planning, and investors may ask about it if your revenue model includes contracted terms.
- [Anti-Dilution](https://velawood.com/glossary-term/anti-dilution/) - Anti-Dilution refers to a right, usually requested by investors purchasing preferred shares, to protection against future rounds whereby securities are sold at a lower price than the current round. There are several types of anti-dilution. See also Broad-Based Weighted Average, Narrow-Based Weighted Average, and Full Rachet.
- [Authorized Shares](https://velawood.com/glossary-term/authorized-shares/) - Authorized Shares refers to the number of shares authorized by a corporation, which is the most shares that the corporation can issue. This number is set forth in the corporation's state formation documents and must be amended when the corporation needs to issue more shares if none are available for issuance.
- [Automatic Conversion](https://velawood.com/glossary-term/automatic-conversion/) - Automatic Conversion refers to a term found in convertible promissory notes (same as convertible debt) whereby the note will automatically convert into equity upon the occurrence of certain events, i.e. a next round financing or maturity. Note that automatic conversion into the next qualified financing round is standard; automatic conversion at maturity is generally negotiated
- [Balance Sheet](https://velawood.com/glossary-term/balance-sheet/) - A Balance Sheet is one of the four main financial statements that provides a summary of a company's finances at a specific point in time. All balance sheets include a company's assets, liabilities, and equity. Unlike other financial statements, the balance sheet provides an accurate summary only at the time it is created.
- [Blind Pool](https://velawood.com/glossary-term/blind-pool/) - A Blind Pool is a fund where the investor's funds are committed and delivered up front. Contrast this with a Capital Call fund structure.
- [Blue Sky Laws](https://velawood.com/glossary-term/blue-sky-laws/) - Blue Sky Laws are securities restrictions enacted at the state level, established to protect a state's investors. These regulations prohibit brokers and investment advisors from recommending, soliciting, or discussing any security with a client unless that security is compliant with the Blue Sky laws of the state that the investor resides in. With startups, the
- [Board of Directors](https://velawood.com/glossary-term/board-of-directors/) - A Board of Directors is a group of people from outside or inside the company who are elected by shareholders to make long-term, strategic, and broad company policy decisions. Boards can be almost any size, but the most effective boards in startups are often 3-5 people.
- [Bootstrapping](https://velawood.com/glossary-term/bootstrapping/) - Bootstrapping is when co-founders self-fund the startup through their own capital or through sales. The intent is to minimize dilution associated with raising capital from investors.
- [Bring Down Certificate](https://velawood.com/glossary-term/bring-down-certificate/) - A Bring Down Certificate is a signed certificate certifying the company's representation and warranties are still true as of the date of the certificate. Bring Down Certificates are often used to certify that the representations and warranties made in an agreement are still true at a later closing date.
- [Broad-Based Weighted Average](https://velawood.com/glossary-term/broad-based-weighted-average/) - Broad-Based Weighted Average is an anti-dilution method in which a preferred shareholder's conversion price (the price by which preferred shares are converted to common shares) is adjusted in a subsequent financing round to a lower price per share. The new conversion price is calculated by multiplying the conversion price by a weighted average rate of
- [Backup Certificate](https://velawood.com/glossary-term/backup-certificate/) - A Backup Certificate is a certificate delivered by a company to the lawyer or law firm in order to provide factual support for an opinion by the law firm.
- [Bankruptcy](https://velawood.com/glossary-term/bankruptcy/) - Bankruptcy is a judicial process undertaken when a company is unable to repay its debts. Bankruptcy proceedings are filed under different chapters of the bankruptcy code depending on the the various solutions and outcomes the company hopes to achieve. Some bankruptcies are involuntary actions brought against debtors by creditors.
- [Benchmark](https://velawood.com/glossary-term/benchmark/) - A Benchmark is a milestone or a goal. Oftentimes, funding or compensation bonuses are tied to benchmarks.
- [Blanket Lien](https://velawood.com/glossary-term/blanket-lien/) - Blanket Lien is a lien over all of a debtor's assets, which means a creditor can seize any of a company's assets if the debtor defaults.
- [Blended Preferences](https://velawood.com/glossary-term/blended-preferences/) - Blended Preferences are when a startup has multiple classes of preferred stock and each class has the same rights in the event of a liquidation. When classes or shareholders have equal rights, the equal rights are often called pari passu rights.
- [Board Consent](https://velawood.com/glossary-term/board-consent/) - Board Consent is the consent to some company action by the board of directors for actions or transactions that need director approval. Board consent can be effected at a meeting or in writing.
- [Board Observer](https://velawood.com/glossary-term/board-observer/) - A Board Observer has the right to observe or be present at the board of directors' meetings but cannot vote on matters before the board of directors. It can be valuable to be at board meetings when decisions are made.
- [Boilerplate](https://velawood.com/glossary-term/boilerplate/) - A Boilerplate is a standard provision that appears in every legal document and effectively means the same thing in every document. The provision may be worded differently, but the provision achieves the same result.
- [Book Value](https://velawood.com/glossary-term/book-value/) - Book Value is the total assets minus the total liabilities of a company. The book value of an asset, as shown on a balance sheet, is typically based on its original cost minus accumulated depreciation. The book value is used for both accounting and tax purposes.
- [Break-up Fee](https://velawood.com/glossary-term/break-up-fee/) - A Break-up Fee is a penalty paid by a potential acquirer to a startup if the potential acquirer backs out of an acquisition. In rare instances, this can also apply in financing rounds.
- [Bridge Financing](https://velawood.com/glossary-term/bridge-financing/) - Bridge Financing is temporary funding for when a startup is running out of cash and needs an infusion of capital to operate the company until the company can raise permanent capital in the form of equity or debt. Bridge financing is typically a six to twelve-month promissory note that converts to preferred stock. The notes
- [Bridge Round](https://velawood.com/glossary-term/bridge-round/) - A Bridge Round is a round of funding that comes between rounds. Typically, a bridge round can be used to extend a startup's financial runway as it prepares for a larger round. For example, a startup may not be ready for a Series A round from a product development or valuation standpoint, so a bridge
- [Brogrammer](https://velawood.com/glossary-term/brogrammer/) - Brogrammer ("bro" + "programmer") is the satirical term for a male software programmer who acts like a frat boy. Stereotypically, a brogrammer, unlike his "nerd" counterpart, is cool, loud, sexist, and likes to party.
- [Broker-Dealer](https://velawood.com/glossary-term/broker-dealer/) - A Broker-Dealer is an individual or firm that buys and sells securities or acts as an intermediary for such sales.
- [Business Plan](https://velawood.com/glossary-term/business-plan/) - A Business Plan is a long document developed by a startup which lays out the blueprint for the startup - including the revenue model, growth plans, market information, and other relevant data. Business plans are not typically requested by investors, but the process of creating one can be useful.
- [Buyout](https://velawood.com/glossary-term/buyout/) - A Buyout is a takeover action by an outside investor. The investor purchases a controlling interest in the company, "buying out" the current ownership.
- [Buy-Sell Agreement](https://velawood.com/glossary-term/buy-sell-agreement/) - A Buy-Sell Agreement is an agreement between co-owners that governs the purchase of one party's entire ownership share in a business. A buy-sell is typically used in a 50/50 ownership situation as a mechanism to avoid the dreaded deadlock.
- [Bylaws](https://velawood.com/glossary-term/bylaws/) - The Bylaws of a corporation set forth the rules for governing corporate matters.
- [Burn Rate](https://velawood.com/glossary-term/burn-rate/) - Burn Rate is calculated as monthly revenues less expenses. It is typically negative because expenses are so high for a startup relative to revenues. Burn rates are helpful in measuring how quickly a startup will go through all of its cash.
- [Call Right](https://velawood.com/glossary-term/call-right/) - A Call Right gives its holder the right to buy a certain number of securities at a certain price before a certain point in time, or upon a certain trigger event.
- [Capital Account](https://velawood.com/glossary-term/capital-account/) - A Capital Account is a ledger in an LLC which tracks the contributions and distributions to members. Each member's capital account is oftentimes adjusted by allocations and distributions of the company's profits and losses.
- [Capital Call](https://velawood.com/glossary-term/capital-call/) - A Capital Call is a notice from a fund (sometimes a venture fund) to its investors (oftentimes called "LPs" because the investors are frequently limited partners in a partnership structure) that a portion of the investor's committed capital is due. In a fund with a capital call structure, the investors commit to a certain contribution
- [Capital Commitment](https://velawood.com/glossary-term/capital-commitment/) - A Capital Commitment is a member or shareholder agreeing to contribute some form of capital to the company.
- [Capital Gains](https://velawood.com/glossary-term/capital-gains/) - Capital Gains is the profit from the sale of an asset or property. Taxes on capital gains are typically much lower than taxes on ordinary income.
- [Capital Stack](https://velawood.com/glossary-term/capital-stack/) - Capital Stack is the layers of financing in a company or project.
- [Capital Stock](https://velawood.com/glossary-term/capital-stock/) - Capital Stock is the shares of stock of a corporation, usually in multiple different classes.
- [Capital Under Management](https://velawood.com/glossary-term/capital-under-management/) - Capital Under Management is the amount of money a fund is actively managing. Funds being actively managed are limited to those funds the private equity or venture capital firm is receiving fees for managing. Many firms use the amount of capital under management as an indicator of size of the fund. Also sometimes known as "assets under management."
- [Capitalization Table (Cap Table)](https://velawood.com/glossary-term/capitalization-table/) - A Capitalization Table or Cap Table is a record of the owners of a company and their ownership percentage of the securities issued by the company. It is typically presented in a spreadsheet.
- [Carried Interest](https://velawood.com/glossary-term/carried-interest/) - Carried Interest, also known as "the Carry" and "the Promote" is typically the return to the managers or general partners of a fund. In the context of a venture capital fund, a typical carried interest is 20% with a catch-up provision. What this means is that once the investors' capital is returned, plus any preferred
- [Carveout](https://velawood.com/glossary-term/carveout/) - A Carveout is an exception from a stated provision in a contract.
- [Certificate of Formation (COF)](https://velawood.com/glossary-term/certificate-of-formation-cof/) - A Certificate of Formation is a legal document that is filed in Texas with the secretary of state to create a corporation, limited liability company, and similar entities. Certificates of formation will contain the entity's basic information (name, registered agent, office address, share structure, etc.). This is known as a Certificate of Incorporation in Delaware.
- [Compounded Monthly Growth Rate (CMGR)](https://velawood.com/glossary-term/compounded-monthly-growth-rate-cmgr/) - Compounded Monthly Growth Rate (CMGR) is a calculation that helps investors measure the periodic growth on an investment over a certain period of time. The calculation for CMGR = (Latest Month/ First Month)^(1/# of Months) -1].
- [Conditions Precedent](https://velawood.com/glossary-term/conditions-precedent/) - Conditions Precedent are conditions that must be satisfied prior to a financing or closing.
- [Conditions Subsequent](https://velawood.com/glossary-term/conditions-subsequent/) - Conditions Subsequent are conditions that must be satisfied after a financing or closing.
- [Consideration](https://velawood.com/glossary-term/consideration/) - Consideration is the benefit that both parties get in a contract. In order for a contract to be binding, there must be consideration on both sides. Consideration can be something you will do, or something you will not do.
- [Class F Common Stock](https://velawood.com/glossary-term/class-f-common-stock/) - Class F Common Stock is a founder-favorable class of common stock that provides founders with greater control over the company due to increased voting power in company decisions. The Class F common stock was created by the Funder Founder Institute within the past decade and is not used frequently.
- [Clawback](https://velawood.com/glossary-term/clawback/) - A Clawback is when limited partners take management fees back from general partners in private equity arrangements. Most private equity agreements have clawback provisions that allow for this action after a fund has substantial losses and a general partner has already been compensated for previous significant gains. The general partner is not allowed to keep
- [Cliff](https://velawood.com/glossary-term/cliff/) - A Cliff is a term used to describe the length of time it takes for stock options or other securities on a vesting schedule to partially or fully vest.
- [Closing](https://velawood.com/glossary-term/closing/) - A Closing is the date, sometimes specific time, and process by which a transaction will be completed.
- [Certificate of Incorporation (COI)](https://velawood.com/glossary-term/certificate-of-incorporation-coi/) - A Certificate of Incorporation is a state filing that creates a corporation once filed with the secretary of state. The filing informs the secretary of state about the name the company plans to operate under, whom the state can serve process on (the registered agent), where to mail important documents, and equity classification information.
- [Change in Control](https://velawood.com/glossary-term/change-in-control/) - A Change in Control (or Change of Control) transaction is one whereby the owners of a company prior to a transaction no longer own a majority of the shares after the transaction.
- [Chapter 7](https://velawood.com/glossary-term/chapter-7/) - A Chapter 7 Bankruptcy is when a company ceases operations and winds down under the direction of a trustee who liquidates all assets and pays off creditors in order of priority.
- [Chapter 11](https://velawood.com/glossary-term/chapter-11/) - A Chapter 11 Bankruptcy is also know as a "reorganization" because the company is allowed to restructure its debt with the help of a bankruptcy trustee.
- [Chief Executive Officer (CEO)](https://velawood.com/glossary-term/chief-executive-officer-ceo/) - The Chief Executive Officer (CEO) is typically the head-honcho of the company. In the context of a startup, "president" and "CEO" are usually synonymous.
- [Churn Rate](https://velawood.com/glossary-term/churn-rate/) - Churn Rate is the loss of future revenue due to the loss of a customer/subscription. There are two types of churn: Gross Churn and Net Revenue Churn. Gross Churn: MRR lost in a given month/MRR at the beginning of the month Net Churn: (MRR lost minus MRR from upsells) in a given month/MRR at the
- [Cohort](https://velawood.com/glossary-term/cohort/) - Cohort is a term used by VCs when analyzing customer data. A group of customers (i.e. customers acquired in a certain month) comprise a cohort and are then tracked against other cohorts.
- [Co-Investment](https://velawood.com/glossary-term/co-investment/) - Co-Investment is when both limited and general partners circumvent the fund and invest in an operating company in the fund's portfolio rather than investing in a holding company through the private equity fund.
- [Collateral](https://velawood.com/glossary-term/collateral/) - Collateral is a debtor's asset that the debtor allows a creditor to have rights to until the debtor's obligations are satisfied. A company can grant collateral in any of its assets, but most often collateral is granted in inventory or equipment.
- [Common Stock](https://velawood.com/glossary-term/common-stock/) - Common Stock is an equity ownership in a company. Common stock is typically issued before any other type of equity. Once a company has raised capital, common stock typically has junior liquidation and distribution rights to other stockholders and creditors.
- [Company Agreement](https://velawood.com/glossary-term/company-agreement/) - A Company Agreement is an internal document for an LLC that provides the framework for how a limited liability company operates. According to the TBOC, "It governs the relations among members, managers, and officers of the company, assignees of membership interests in the company, and the company itself; and other internal affairs of the company."
- [Company Record Book](https://velawood.com/glossary-term/company-record-book/) - A Company Record Book is also called a Corporate Record Book. Simply, it is a book that houses your important company documents. In the old days, companies kept a three-ring binder with this important information. Today, it's common to house this information electronically. It's imperative to keep your corporate records in one place to share
- [Cram Down Round](https://velawood.com/glossary-term/cram-down-round/) - A Cram Down Round is a financing round where new investors receive favorable contractual terms that significantly reduce (dilute) previous investors ownership percentages and rights. Typically, to receive these terms, the new investors must invest substantial amounts of money.
- [Contingent Liability](https://velawood.com/glossary-term/contingent-liability/) - Contingent Liability is a liability that is not certain, but could arise based on certain events. For example, if a startup is seeking capital during an ongoing lawsuit, the startup would need to disclose the lawsuit as a contingent liability in financing docs.
- [Conversion Discount](https://velawood.com/glossary-term/conversion-discount/) - A Conversion Discount is when the holder of a convertible note has a right to convert into a subsequent financing round or transaction at a "discount" to the price per share of that round.
- [Conversion Price Adjustment](https://velawood.com/glossary-term/conversion-price-adjustment/) - A Conversion Price Adjustment is the adjustment to the conversion price of a preferred series of shares upon the occurrence of certain events. It is typically an anti-dilution right.
- [Conversion Rights](https://velawood.com/glossary-term/conversion-rights/) - Conversion Rights are the rights of a preferred stockholder to convert preferred stock into common stock.
- [Convertible Debt](https://velawood.com/glossary-term/convertible-debt/) - Convertible Debt is an alternative to equity fundraising. The investor "lends" the startup money at a reasonable interest rate and with a maturity date in the 12-24 month range (usually). The understanding and intent of the investor and company is not for the startup to repay the debt, but rather for that debt to convert
- [Convertible Note](https://velawood.com/glossary-term/convertible-note/) - A Convertible Note is short-term debt that converts into equity, typically in conjunction with a financing round. By using a convertible note, the investor would be loaning money to a startup, and instead of a return in the form of principal with interest, the investor would receive equity in the startup.
- [Convertible Promissory Note](https://velawood.com/glossary-term/convertible-promissory-note/) - See Convertible Note.
- [Convertible Security](https://velawood.com/glossary-term/convertible-security/) - A Convertible Security is a security that may convert into another kind of security in a company. See Convertible Note.
- [Convertible Stock](https://velawood.com/glossary-term/convertible-stock/) - Convertible Stock is stock that converts into another class or series of stock, typically preferred stock that converts into common stock.
- [Corporate Governance](https://velawood.com/glossary-term/corporate-governance/) - Corporate Governance is the manner in which an entity is governed and regulated. The term is used across all entity types - corporations, LLCs, and partnerships. Corporate governance documents include the certificate of formation/incorporation and bylaws for a corporation, and the certificate of formation and company agreement (or operating agreement) for an LLC.
- [Corporate Resolution](https://velawood.com/glossary-term/corporate-resolution/) - A Corporate Resolution is a document that sets forth the actions of a corporation's board or shareholders. In the context of an LLC, it may simply be called a "resolution." A certain level of consent is required for a resolution to be approved.
- [Corporate VC](https://velawood.com/glossary-term/corporate-vc/) - A Corporate VC is the VC arm of an operating company. Google Ventures is a well known Corporate VC. Their investments are typically strategic in nature and can act as early-stage R&D.
- [Co-Sale](https://velawood.com/glossary-term/co-sale/) - Co-Sale is a contractual right allowing a shareholder to sell his shares at the same time as a majority shareholder. The shareholder with the right receives the same terms as the majority holder. Often called a Tag Along Right.
- [Covenant](https://velawood.com/glossary-term/covenant/) - A Covenant is a binding agreement to act, or refrain from acting, on some legal right. If a company agrees to refrain from acting on its legal right, the covenant is called a negative covenant. Companies can be faced with civil penalties for breaking a covenant.
- [Coworking](https://velawood.com/glossary-term/co-working/) - Coworking is when you are working out of a shared office space with other startups. Examples include The DEC, Common Desk, WeWork, The Grove, and WERX.
- [Crowdfunding](https://velawood.com/glossary-term/crowdfunding/) - Crowdfunding is funding projects through the collective efforts of a number of unrelated individuals. Crowdfunding can be reward-based, equity-based, or debt-based.
- [Cumulative Dividend](https://velawood.com/glossary-term/cumulative-dividend/) - A Cumulative Dividend for a preferred stock is when its holders have a right to accrued dividends before common stockholders are paid any dividends.
- [Cumulative Voting](https://velawood.com/glossary-term/cumulative-voting/) - Cumulative Voting is a type of voting system that helps strengthen the ability of minority shareholders to elect a director. This method allows shareholders to cast all of their votes for a single nominee for the board of directors when the company has multiple openings on its board.
- [Current Ratio](https://velawood.com/glossary-term/current-ratio/) - Current Ratio is a measurement of a company's ability to pay obligations determined by dividing the company's current assets by its current liabilities.
- [Deal Flow](https://velawood.com/glossary-term/deal-flow/) - Deal Flow is the flow of potential deals to an investor.
- [Double Trigger Acceleration](https://velawood.com/glossary-term/double-trigger-acceleration/) - Double Trigger Acceleration is the partial or full acceleration of vesting of an employee's options or stock based on the occurrence of two distinct events. Most typically, the two events are the sale of the company and the involuntary termination of the employee.
- [Drag Along Rights](https://velawood.com/glossary-term/drag-along-rights/) - Drag Along Rights are the rights of majority investors who are selling their equity in the company to force minor investors to sell their equity interest as well.
- [Customer Acquisition Cost (CAC)](https://velawood.com/glossary-term/customer-acquisition-cost-cac/) - Customer Acquisition Cost (CAC) is the cost to acquire a new customer. CAC can be calculated by dividing the total costs associated with acquisition by the total new customers, within a specific time period.
- [Data Room](https://velawood.com/glossary-term/data-room/) - A Data Room is an online repository of company docs. Typically, a startup will create a data room of relevant company docs to share with potential investors. This is preferred to emailing out docs because the startup can keep them all in one place and update them as necessary. The company can also password protect
- [Date of Issue](https://velawood.com/glossary-term/date-of-issue/) - The Date of Issue is the date that the securities (shares or units) are issued to an investor.
- [Debt Financing](https://velawood.com/glossary-term/debt-financing/) - Debt Financing is raising money for working capital or capital expenditure through some form of a loan.
- [Debt-to-Equity Ratio](https://velawood.com/glossary-term/debt-to-equity-ratio/) - The Debt-to-Equity Ratio is a debt ratio used to measure a company's financial leverage, calculated by dividing a company's total liabilities by its stockholders' equity. The D/E ratio indicates how much debt a company is using to finance its assets relative to the amount of value represented in shareholders' equity.
- [Deck](https://velawood.com/glossary-term/deck/) - See Pitch Deck.
- [Default](https://velawood.com/glossary-term/default/) - Default is when a company is unable to perform the obligations it agreed to in a loan agreement. Which failures by the company constitute default and which rights creditors have upon default vary from agreement to agreement. Often, default is failure to make payments on a loan.
- [Demand Registration Rights](https://velawood.com/glossary-term/demand-registration-rights/) - Demand Registration Rights are rights that give an investor the right to force a company to register its shares for sale to the public. These rights are typically contained in Series A and later financing rounds.
- [Demo Day](https://velawood.com/glossary-term/demo-day/) - Demo Day is "pitch day," or when startups in an accelerator pitch to investors.
- [Depreciation](https://velawood.com/glossary-term/depreciation/) - Depreciation is an accounting method of allocating the cost of a tangible asset over its useful life.
- [Delaware General Corporation Law (DGCL)](https://velawood.com/glossary-term/delaware-general-corporation-law-dgcl/) - DGCL is Delaware General Corporation Law. These statutes govern corporate law (including LLCs) in Delaware.
- [Dilution](https://velawood.com/glossary-term/dilution/) - Dilution is the reduction in ownership percentage of a share of stock caused by the issuance of new stock.
- [Director](https://velawood.com/glossary-term/director/) - A Director is an elected or appointed person who sits on the board of directors and helps the corporation to make certain decisions. Typically the board of directors is responsible for setting the strategic direction of a company.
- [Directors and Officers' (D&O) Insurance](https://velawood.com/glossary-term/directors-and-officers-do-insurance/) - Directors and Officers' (D&O) Insurance is insurance purchased by a company to protect its directors and officers from claims arising out of company activities or to indemnify them for such claims.
- [Distribution](https://velawood.com/glossary-term/distribution/) - Distribution is a payment by a company to its shareholders (or members in the context of an LLC).
- [Dividend](https://velawood.com/glossary-term/dividend/) - A Dividend is a payment made by a corporation to its stockholders. Dividends can be paid in cash or stock. Startups rarely, if ever, pay dividends.
- [Down Round](https://velawood.com/glossary-term/down-round/) - A Down Round is a round of financing when the startup is at a lower valuation than the valuation placed upon the startup by earlier investors.
- [Entrepreneur in Residence (EIR)](https://velawood.com/glossary-term/entrepreneur-in-residence-eir/) - An Entrepreneur in Residence (EIR) is an entrepreneur with significant startup experience who spends time with startups or companies to lend perspective and guidance.
- [Equity](https://velawood.com/glossary-term/equity/) - Equity broadly refers to the ownership of a company, which can be represented by stock or other units of ownership. When an investor has ownership of a company, he or she has equity in the company.
- [Equity Financing](https://velawood.com/glossary-term/equity-financing/) - Equity Financing is the direct investment by investors in exchange for ownership (equity).
- [Evergreen Fund](https://velawood.com/glossary-term/evergreen-fund/) - Evergreen Funds are investment funds with an indefinite life that allow for returns to be re-invested back into the fund instead of distributed to the investors.
- [Exercising Stock Options](https://velawood.com/glossary-term/exercising-stock-options/) - Exercising Stock Options means the option holder purchases the underlying stock, at the exercise price, in accordance with the option agreement.
- [Drive-By VC](https://velawood.com/glossary-term/drive-by-vc/) - Drive-By VC is a term used to describe VCs who usually just make investments and do not offer other support or guidance.
- [Dry Powder](https://velawood.com/glossary-term/dry-powder/) - Dry Powder is the amount of money that a VC or investor has available to make investments.
- [Earnout](https://velawood.com/glossary-term/earnout/) - An Earnout is a portion of a sale agreement whereby the sellers receive certain payments contingent on future events, typically revenue or profit milestones.
- [Enterprise Value (EV)](https://velawood.com/glossary-term/enterprise-value-ev/) - Enterprise Value (EV) is a valuation measurement determined by the sum of the long term debt of a company and its common stock's market value, minus cash the company has on hand.
- [Equity Crowdfunding](https://velawood.com/glossary-term/equity-crowdfunding/) - See Crowdfunding.
- [Employee Retirement Income Security Act (ERISA)](https://velawood.com/glossary-term/employee-retirement-income-security-act-erisa/) - The Employee Retirement Income Security Act (ERISA) sets minimum standards for certain pension and health plans to protect the retirement assets of American employees.
- [Escrow](https://velawood.com/glossary-term/escrow/) - Escrow describes documents, funds, and/or other assets being held by a third party until the parties of the transaction have satisfied certain obligations.
- [Exercise Price](https://velawood.com/glossary-term/exercise-price/) - The Exercise Price is the price per share at which an option is exercised, i.e. the price at which the option holder can buy or sell the underlying security. See Exercising Stock Options.
- [Due Diligence](https://velawood.com/glossary-term/due-diligence/) - Due Diligence is the process an investor goes through prior to making an investment in a company. This typically includes meeting and interviewing the founders and key stakeholders, reviewing company documents and financials, and interviewing customers, when applicable.
- [Early-Stage Financing](https://velawood.com/glossary-term/early-stage-financing/) - Early-Stage Financing refers to investments that happen early in a company's lifecycle.
- [Earnings Before Interest and Taxes (EBIT)](https://velawood.com/glossary-term/earnings-before-interest-and-taxes-ebit/) - Earnings Before Interest and Taxes (EBIT) is an operating profit metric. The EBIT is determined by excluding interest and taxes from expenses and then subtracting those expenses from revenues. Companies' values are often projected as multiples of EBIT.
- [Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA)](https://velawood.com/glossary-term/earnings-before-interest-tax-depreciation-and-amortization-ebitda/) - EBITDA is essentially net income with interest, taxes, depreciation, and amortization added back to it.
- [Employer Identification Number (EIN)](https://velawood.com/glossary-term/employer-identification-number-ein/) - An Employer Identification Number (EIN) is the number issued by the IRS to a company that identifies the company as a taxpayer in the US. An EIN is required for a company to open up a bank account and file taxes.
- [Elevator Pitch](https://velawood.com/glossary-term/elevator-pitch/) - An Elevator Pitch is a brief description of a startup. It should be brief enough to be delivered during an elevator ride.
- [Employee Stock Option Plan (ESOP)](https://velawood.com/glossary-term/employee-stock-option-plan-esop/) - An Employee Stock Option Plan (ESOP) is a company issued plan that allows a company to grant options to its employees and service providers.
- [Finder's Fee](https://velawood.com/glossary-term/finders-fee/) - A Finder's Fee is a commission paid to a third-party for facilitating successful transactions, whether acquisitions or M&A, between a startup, investors, or potential partners.
- [Flat Round](https://velawood.com/glossary-term/flat-round/) - A Flat Round is a round of financing with the same post-money valuation as that of the previous financing round.
- [Follow-On Financing](https://velawood.com/glossary-term/follow-on-financing/) - Follow-On Financing is additional funding raised to supplement a startup's first round of financing and to support business development and growth.
- [Foreign Corrupt Practices Act (FCPA)](https://velawood.com/glossary-term/foreign-corrupt-practices-act-fcpa/) - The Foreign Corrupt Practices Act (FCPA) makes it unlawful for U.S. companies and individuals to offer anything of value to foreign officials in order to build or retain business.
- [Foreign Qualification](https://velawood.com/glossary-term/foreign-qualification/) - Foreign Qualification is permission by a foreign state (a state outside of the state where the company was formed) for a company to transact business in the foreign state. If a company transacts business in a state without being qualified, the company may lose some of its rights in the foreign state.
- [Exit Event](https://velawood.com/glossary-term/exit-event/) - An Exit Event is an event where founders and early investors can sell their interest in a company for cash. An exit can be an initial public offering (IPO) or an acquisition by another company.
- [Exit Strategy](https://velawood.com/glossary-term/exit-strategy/) - An Exit Strategy is a company's plan to sell the company or undergo an initial public offering once the company has reached a certain level of success.
- [Face Value](https://velawood.com/glossary-term/face-value/) - Face Value is the dollar value (or the nominal value, the stated value) of a security (i.e. a share of stock, a bond, etc.). Face Value is rarely the market value of the security. For stock, face value is synonymous with par value, the original price of the stock. For bonds, face value is the
- [Family Office](https://velawood.com/glossary-term/family-office/) - A Family Office is a high-net-worth private wealth management firm for families. The firms typically provide investment advice but also provide creative ways to structure the family's' wealth to prevent losses.
- [Fiduciary Duty](https://velawood.com/glossary-term/fiduciary-duty/) - Fiduciary Duty is the legal and ethical duty that an individual has to an entity, which includes the duty of care and the duty of loyalty.
- [Form 2553](https://velawood.com/glossary-term/form-2553/) - Form 2553 is a form that companies must file with the SEC to be designated as an S-corporation and to receive the taxation benefits of S-corporation status (pass through taxation). The company will not be granted pass through taxation for the current fiscal year if Form 2553 is not filed within the first three months
- [Form 8-K](https://velawood.com/glossary-term/form-8-k/) - Form 8-K is a report that publicly traded companies must file when a major event happens within the company. The Form 8-K must be filed with the Securities Exchange Commission, and it is designed to give shareholders and the Securities Exchange Commission notice of the major event. These major events include a CEO change, merger,
- [Form 10-K](https://velawood.com/glossary-term/form-10-k/) - Form 10-K is an annual performance report which must be filed with the Securities Exchange Commission. The 10-K provides extensive information regarding the company's business and financial condition, which includes audited financial statements.
- [Form S-1](https://velawood.com/glossary-term/form-s-1/) - Form S-1 is an SEC disclosure form that provides general information and risk disclosures about the company. The company may not undergo an initial public offering if it has not filed Form S-1.
- [Form S-2](https://velawood.com/glossary-term/form-s-2/) - Form S-2 is an SEC form that is used when selling securities to the public, and it is less burdensome than most SEC forms because it applies previously filed information. The SEC allows the forms to be used by companies that have previously registered securities and fully complied with the Securities Exchange Act of 1934
- [Form S-3](https://velawood.com/glossary-term/form-s-3/) - Form S-3 is an SEC security registration form that is less onerous than other SEC registration forms because it cannot be filed unless the company has registered securities with the SEC previously and complied with the Securities Exchange Act of 1934's reporting requirements regarding the securities previously registered.
- [Form S-4](https://velawood.com/glossary-term/form-s-4/) - Form S-4 is an SEC registration form designed to provide disclosures after companies merge with, acquire, or are acquired by another company.
- [Founder](https://velawood.com/glossary-term/founder/) - A Founder creates or participates in the formation stage of a startup. Founders receive the startup's initial shares in return for a capital contribution or services provided to the company.
- [Fair Market Value](https://velawood.com/glossary-term/fair-market-value/) - Fair Market Value is the price that a reasonable third-party would pay for a given asset in the open market.
- [Finder](https://velawood.com/glossary-term/finder/) - A Finder is an individual who facilitates transactions, whether acquisitions or M&A, between companies and other parties.
- [Free Cash Flow](https://velawood.com/glossary-term/free-cash-flow/) - Free Cash Flow is a financial metric illustrating cash that the company has on hand to fund the growth of the company or distribute to security holders.
- [Freemium](https://velawood.com/glossary-term/freemium/) - Freemium is the free, core version of an app as opposed to the premium, paid version of the app, which generally has fewer or no ads and more features.
- [Freeze Out](https://velawood.com/glossary-term/freeze-out/) - A Freeze Out occurs when a majority of shareholders prevents minority shareholders from receiving dividends or making decisions within the company, leaving minority shareholders with little choice but to sell their shares.
- [Friends and Family Round](https://velawood.com/glossary-term/friends-and-family-round/) - A Friends and Family Round is the first round of funding for a company that consists of obtaining capital from founders' friends and family.
- [Full Ratchet Anti-Dilution](https://velawood.com/glossary-term/full-ratchet/) - Full Ratchet Anti-Dilution is a shareholder protection provision that prevents early shareholders who have the protection from being diluted by later down rounds. If the company has a down round, the price the original shareholder paid for its securities is reduced to match the price paid by the investors in the down round. Full ratchet is
- [Fully-Diluted Basis](https://velawood.com/glossary-term/fully-diluted-basis/) - Fully-Diluted Basis is the total number of shares that would be outstanding if all securities that could convert into shares, such as convertible notes, options, warrants, and preferred shares, converted to common stock. Investors oftentimes want to know what their ownership will look like on a basic and a fully-diluted basis.
- [Fund](https://velawood.com/glossary-term/fund/) - A Fund is an investment entity formed to collect many investors' investments and then invest for the investors. The fund can invest in companies and in amounts that the investors individually cannot, allowing for diversification and potentially greater returns.
- [Fund of Funds](https://velawood.com/glossary-term/fund-of-funds/) - A Fund of Funds is an investment portfolio composed of only other investment funds, rather than investments made into stocks or other companies.
- [Gamify/Gamification](https://velawood.com/glossary-term/gamifygamification/) - Gamification occurs when real-world activities are made game-like in order to motivate people to achieve goals. Gamification leverages people's natural tendencies for competition and achievement. Examples include rewarding users for achievements and earning badges.
- [Generally Accepted Accounting Principles (GAAP)](https://velawood.com/glossary-term/generally-accepted-accounting-principles-gaap/) - Generally Accepted Accounting Principles (GAAP) are mandatory financial accounting procedures and methods that public companies must comply with when reporting their financials. Private companies are not required to use GAAP as their accounting method, but many do.
- [General Partner (GP)](https://velawood.com/glossary-term/general-partner-gp/) - A General Partner (GP) is a partner in a partnership. In limited partnerships, there are general partners, who manage the day-to-day operations of the partnership, and limited partners, who invest in the partnership but are not allowed to control the day-to-day operations or they risk becoming a general partner. Unlike limited partners, general partners do
- [General Partnership](https://velawood.com/glossary-term/general-partnership/) - A General Partnership is the default entity under most jurisdictions. When two or more entrepreneurs join together to operate a business, they have wittingly, or unwittingly, formed a general partnership. There is no need to file any document with the state to formalize or legitimize their undertaking. You want to avoid a general partnership.
- [General Solicitation](https://velawood.com/glossary-term/general-solicitation/) - General Solicitation is a company or fund publicly advertising its securities. General solicitations offer the potential to reach more investors. However, general solicitation may cause the company to have to comply with more stringent security registration requirements at the state and federal levels.
- [Going Concern](https://velawood.com/glossary-term/going-concern/) - A Going Concern is an accounting term for companies that have reached a point of viability where they can continue operations indefinitely with the resources the company has.
- [Golden Handcuffs](https://velawood.com/glossary-term/golden-handcuffs/) - Golden Handcuffs are financial incentives for founders and/or key employees to prevent a departure from the company before some predetermined date or milestone through stock options vesting or bonuses that are only received after the predetermined date.
- [Golden Parachute](https://velawood.com/glossary-term/golden-parachute/) - A Golden Parachute is a large severance package given to executives of a company if the executive is forced to resign or is terminated after a merger or acquisition of the company.
- [Gross Profit](https://velawood.com/glossary-term/gross-profit/) - Gross Profit is the profit a company makes after deducting the costs associated with making and selling products and/or providing services.
- [Growth Hacker](https://velawood.com/glossary-term/growth-hacker/) - A Growth Hacker is someone whose job is to figure out ways to grow the company.
- [Growth Stage](https://velawood.com/glossary-term/growth-stage/) - The Growth Stage generally begins once the startup is generating revenues and is now investing more in marketing and user acquisition than in product development.
- [Founders Stock](https://velawood.com/glossary-term/founders-stock/) - Founders Stock refers to equity granted to a founder when the company is formed. The equity typically has a par value that is next to nothing and a four year vesting schedule.
- [Holding Company](https://velawood.com/glossary-term/holding-company/) - A Holding Company is an entity created for the purpose of owning entities and assets.
- [Holding Period](https://velawood.com/glossary-term/holding-period/) - A Holding Period is the amount of time that a person or entity owns an asset or security.
- [Hostile Takeover](https://velawood.com/glossary-term/hostile-takeover/) - A Hostile Takeover is the takeover of a company without the approval of the board of directors and is usually accomplished by either the purchase of a controlling interest in the company and/or the voting in of a new board of directors.
- [Hurdle Price](https://velawood.com/glossary-term/hurdle-price/) - The Hurdle Price is the price associated with an incentive unit in an LLC. Incentive unit holders are entitled to distributions only when each non-incentive unit holding member of the company receives distributions per unit in an amount equal to the hurdle price.
- [Illiquid](https://velawood.com/glossary-term/illiquid/) - A security or asset is Illiquid if there is not a ready market to sell the security for cash.
- [Incentive Stock Option (ISO)](https://velawood.com/glossary-term/incentive-stock-option-iso/) - 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 the options, as opposed to when the options are exercised. Also, the shareholder is not
- [Incentive Unit Plan](https://velawood.com/glossary-term/incentive-unit-plan/) - 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 the company after the date of the grant (hence, incentive units are also known as
- [Incorporation](https://velawood.com/glossary-term/incorporation/) - Incorporation is the act of incorporating a company through filing a required document with the secretary of state and paying an incorporation fee.
- [Incubator](https://velawood.com/glossary-term/incubator/) - 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 to develop.
- [Indemnity](https://velawood.com/glossary-term/indemnity/) - Indemnity is a company's agreement to pay another party's losses under a contract regardless of whether the company caused the losses.
- [Haircut](https://velawood.com/glossary-term/haircut/) - A Haircut is either the difference between the purchase price and sale price of an asset, or the market value and collateral value of an asset.
- [Hedge Fund](https://velawood.com/glossary-term/hedge-fund/) - A Hedge Fund is an investment vehicle that pools accredited and institutional investors' money to invest in aggressive and complex positions that will provide an active return to the investors.
- [Hockey Stick Chart](https://velawood.com/glossary-term/hockey-stick-chart/) - A Hockey Stick Chart is a line chart in which a sharp increase or decrease occurs over a period of time. Hockey Stick refers to the shape of a graph showing a dramatic increase or decrease in revenue.
- [Holdback](https://velawood.com/glossary-term/holdback/) - A Holdback is a portion of the purchase price that a purchaser does not immediately give to the seller upon closing in order to ensure that there are no post-closing issues with any of the representations and warrants of the seller. See Holdback Escrow.
- [Holdback Escrow](https://velawood.com/glossary-term/holdback-escrow/) - A Holdback Escrow is a portion of the purchase price that a purchase does not immediately give to the seller upon closing to ensure that there are no post-closing issues with any of the representations and warranties of the seller. The purchaser places the holdback escrow in a third-party escrow account until the holdback period
- [Hurdle Rate](https://velawood.com/glossary-term/hurdle-rate/) - The Hurdle Rate is the minimum rate of return required by an investor in order for a fund manager to collect management fees.
- [Indemnification](https://velawood.com/glossary-term/indemnification/) - 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 who caused the harm must compensate the company for the money the company paid to
- [Indemnification Cap](https://velawood.com/glossary-term/indemnification-cap/) - 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 typically present in a sale or purchase agreement.
- [Independent Contractor](https://velawood.com/glossary-term/independent-contractor/) - An Independent Contractor is a service provider under a contract, but unlike employees, the independent contractor controls how the service is performed. Whether the service provider controls the performance and is an independent contractor or whether the service provider does not have control over the performance is determined using a factored analysis in most states.
- [Independent Director](https://velawood.com/glossary-term/independent-director/) - 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.
- [Investor Rights Agreement (IRA)](https://velawood.com/glossary-term/investor-rights-agreement-ira/) - An Investor Rights Agreement (IRA) is an agreement between an investor and a company that contractually guarantees the investor certain rights including, but not limited to, voting rights, inspection rights, rights of first refusal, and observer rights.
- [Issue Price](https://velawood.com/glossary-term/issue-price/) - The Issue Price is the price at which a company's securities are sold.
- [Issued Shares](https://velawood.com/glossary-term/issued-shares/) - Issued Shares are the amount of shares the company has sold or granted to shareholders.
- [Issuer](https://velawood.com/glossary-term/issuer/) - An Issuer is an entity that has "issued" or sold its securities.
- [Information Rights](https://velawood.com/glossary-term/information-rights/) - Information Rights are investors' agreed upon rights to receive certain financial records and other information from the company. Some rights will provide timelines for the company to provide certain financial reports and statements to the investor. Most information rights also allow investors the opportunity to view these records in person and discuss the information with
- [Initial Public Offering (IPO)](https://velawood.com/glossary-term/initial-public-offering-ipo/) - An Initial Public Offering (IPO) is the first sale of a company's stock on a public stock exchange. The company must comply with stringent SEC requirements to be eligible to be a publicly traded company. And, in most instances, a startup has been very successful if it reaches an initial public offering.
- [In-Kind Distribution](https://velawood.com/glossary-term/in-kind-distribution/) - An In-Kind Distribution is a distribution to investors made in the form of securities or other property when a company is unable or unwilling to distribute cash.
- [Inside Round](https://velawood.com/glossary-term/inside-round/) - An Inside Round is a round of financing where money is raised only from investors from previous rounds.
- [Insolvency](https://velawood.com/glossary-term/insolvency/) - Insolvency is when a company cannot afford to pay its debts. If insolvency lasts for an extended period, creditors may bring an action to liquidate some of the company's assets to repay the creditor, or alternatively, initiate a bankruptcy proceeding against the company.
- [Institutional Investor](https://velawood.com/glossary-term/institutional-investor/) - An Institutional Investor is an entity with large amounts of resources that invests significant amounts of money on behalf of individuals and companies. Institutional investors are typically investment companies, mutual funds, brokerages, and insurance companies.
- [Integration](https://velawood.com/glossary-term/integration/) - Integration, in regard to a sale of securities, is when the SEC determines that two of a company's financing rounds were actually one large round for securities regulation purposes. The SEC then combines the two rounds, and depending on the amounts of money raised and who the investors were, the combined round may not fall
- [Interest](https://velawood.com/glossary-term/interest/) - Interest is a fee paid at a particular rate for borrowing money from a lender.
- [Internal Rate of Return (IRR)](https://velawood.com/glossary-term/internal-rate-of-return-irr/) - 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.
- [Invention Assignment](https://velawood.com/glossary-term/invention-assignment/) - An Invention Assignment is an agreement where a founder or developer assigns to the company all of the intellectual property the founder or developer has created related to the company.
- [Investment Banker](https://velawood.com/glossary-term/investment-banker/) - An Investment Banker is an entity or individual that underwrites companies' security offerings. Investment bankers may also facilitate mergers and acquisitions.
- [Investment Company Act](https://velawood.com/glossary-term/investment-company-act/) - The Investment Company Act is legislation that regulates "investment companies," or companies that invest and trade in securities and sell their own securities. The Act forces the companies to register with the SEC, lists specific requirements for the companies, and helps define the size, structure, and function of the companies.
- [Investment Thesis](https://velawood.com/glossary-term/investment-thesis/) - An Investment Thesis is the core set of investment principles for a fund. The principles set forth the industry and/or types of companies that the fund will invest in.
- [J-Curve](https://velawood.com/glossary-term/j-curve/) - A J-Curve is a cash flow graph depicting returns vs. time. It demonstrates that at the beginning of a private equity fund cash flow and returns are going to be negative due to investing the funds, losses, and expenses. The upward curve of the J represents the time when the cash flow is increasing and
- [Jumpstart Our Business Startups Act (JOBS Act)](https://velawood.com/glossary-term/jumpstart-our-business-startups-act-jobs-act/) - The Jumpstart Our Business Startups Act (JOBS Act) is a law intended to encourage funding of United States small businesses and startups by easing securities regulations imposed by the SEC. The Act focuses on making it easier for startups to get capital financing, with the Crowdfunding Act playing a major part. The Crowdfunding Act allows
- [Joinder Page](https://velawood.com/glossary-term/joinder-page/) - A Joinder Page is a signature page executed and joined to an agreement that was previously executed. The person executing the joinder page becomes bound by the agreement.
- [Joint Venture](https://velawood.com/glossary-term/joint-venture/) - A Joint Venture is an agreement between individuals or entities to complete some specific business task within a certain timeframe.
- [Junior Debt](https://velawood.com/glossary-term/junior-debt/) - Junior Debt is debt that is a lower priority to senior debt. Junior debt is also known as "subordinated debt."
- [Key Employee](https://velawood.com/glossary-term/key-employee/) - A Key Employee is an employee who plays a significant part in a startup's success and has a major ownership and/or decision-making role in the business. Key employees are usually founders and C-level executives. Key employees may have certain restrictions or be tied to certain provisions in a later-stage financing round.
- [Key Man Insurance](https://velawood.com/glossary-term/key-man-insurance/) - Key Man Insurance is simply insurance taken out on the key persons (usually founders) of a business. In the event of a key person's death, the insurance proceeds can be used to fund the business or to buy out the key person's estate. This is oftentimes a requirement of venture funding.
- [Lapsed Option](https://velawood.com/glossary-term/lapsed-option/) - A Lapsed Option is an option that can no longer be exercised because some necessary condition has expired. Often stock options are granted but have a finite time period within which the options must be exercised. Once the finite period ends, the options that have not been exercised are said to "lapse."
- [Later-Stage Financing](https://velawood.com/glossary-term/later-stage-financing/) - Later-Stage Financing is a round that occurs once the startup has matured to an extent. Generally speaking, through the A or B round is early-stage financing. Everything after that is later-stage financing. If you were to really break it down, through A would be early, B & C would be mid-stage, and everything after would
- [Lead Investor](https://velawood.com/glossary-term/lead-investor/) - A Lead Investor is the investor who is leading a startup's financing round. The investor leads by (1) writing the biggest check, (2) negotiating the terms, or (3) both. Oftentimes, a round can not really start until a lead investor is identified.
- [Letter of Intent (LOI)](https://velawood.com/glossary-term/letter-of-intent-loi/) - A Letter of Intent (LOI) is a document that indicates the material points of a deal, or intent of the parties. It is typically non-binding and a precursor to more definitive documents; though it is not uncommon for certain provisions (like confidentiality, exclusive negotiation period, or break-up fees) to be binding. See also Indication of
- [License](https://velawood.com/glossary-term/license/) - A License is an agreement between an intellectual property owner and an individual or entity for the use of the intellectual property. The individual or entity does not purchase the intellectual property, but just the right to use or benefit from the intellectual property for a certain period of time and only for certain uses.
- [Lifestyle Company](https://velawood.com/glossary-term/lifestyle-company/) - A Lifestyle Company is a startup who is no longer seeking rapid growth and an exit (through a sale or IPO), but rather plans to operate as a going concern into the indefinite future. Not a bad thing, but generally not what venture capital investors are looking for.
- [Lifetime Value (LTV)](https://velawood.com/glossary-term/lifetime-value-ltv/) - Lifetime Value (LTV) is the present value of the future net profit from a customer over the duration of the relationship. LTV helps determine the long-term value of the customer and how much net value a company generates per customer after calculating customer acquisition costs (See CAC).
- [Limited Liability Company (LLC)](https://velawood.com/glossary-term/limited-liability-company-llc/) - An Limited Liability Company (LLC) is the best of both worlds when it comes to entities. An LLC offers the benefits of limited liability, taxations as a partnership, and management flexibility. An LLC can elect to be "manager-managed" or "member-managed."
- [Limited Liability Partnership (LLP)](https://velawood.com/glossary-term/limited-liability-partnership-llp/) - A Limited Liability Partnership (LLP) is a General Partnership with an important modification: the partners are not personally liable for all debts and obligations, except to the extent they have agreed bear personal fault.
- [Limited Partners (LPs)](https://velawood.com/glossary-term/limited-partners/) - Limited Partners (LPs) are partners in a limited partnership that are not personally liable for the company's debts or liabilities. The limited partner invests in the company but cannot exercise control over the day-to-day operations of the company. If the limited partner does exercise such control, the limited partner may lose its limited liability protection.
- [Legal Opinion](https://velawood.com/glossary-term/legal-opinion/) - A Legal Opinion is a letter written by a lawyer providing the lawyer's official opinion and judgment on a matter as an expert in the field. In the venture capital context, the lawyer is often asked to write an opinion on the validity of a company's representations and warranties in financial documents.
- [Limited Partnership (LP)](https://velawood.com/glossary-term/limited-partnership-lp/) - A Limited Partnership (LP) has two classes of partners: General Partners and Limited Partners. General Partners in an LP are like General Partners in a conventional partnership (i.e., have personal liability for the debts of the business). Limited Partners are not liable for debts of the business.
- [Liquidation](https://velawood.com/glossary-term/liquidation/) - A Liquidation is when a company is forced to sell its assets to pay off its liabilities because the company is going through a voluntary or involuntary bankruptcy proceeding or is winding up its business operations.
- [Market Terms](https://velawood.com/glossary-term/market-terms/) - Market Terms are terms in an agreement that are standard or "market." In regard to venture capital agreements, most startups and investors use SeriesSeed.com and NVCA.org as a baseline for setting terms for those rounds.
- [Materiality Qualifier](https://velawood.com/glossary-term/materiality-qualifier/) - Materiality Qualifier is modifying a part of a contract to require a higher threshold. For example, a "material" breach of a contract requires the bad actor to commit a greater wrong than just a breach of any term of the contract.
- [Materiality Scrape](https://velawood.com/glossary-term/materiality-scrape/) - A Materiality Scrape is a provision generally found in purchase agreements (i.e. stock purchase agreement, asset purchase agreement, merger agreement, etc.) that effectively eliminates any materiality qualifiers in representations and warranties for determining whether a breach has occurred in regard to indemnification provisions.
- [Most Favored Nations Clause](https://velawood.com/glossary-term/most-favored-nations-clause/) - A Most Favored Nations Clause requires that the company gives the investor the best possible investment terms in the future. Note that this right usually expires after the next round. From a company perspective, try to avoid MFN clauses when possible.
- [Minimum Viable Product (MVP)](https://velawood.com/glossary-term/minimum-viable-product-mvp/) - The Minimum Viable Product (MVP) is the most basic commercially viable iteration of a product. Once an MVP is launched, a company can find issues with the product and correct them with a better, bug-free product.
- [Liquidation Event](https://velawood.com/glossary-term/liquidation-event/) - A Liquidation Event is typically defined as a sale of substantially all of the assets of the company (not in a bankruptcy scenario). In investment agreements, liquidation events often trigger investors' rights regarding distributions, conversions, or preferences.
- [Liquidation Preference](https://velawood.com/glossary-term/liquidation-preference/) - Liquidation Preference specifies which investors get paid first and how much they get paid in the event of a liquidation event, such as the sale of a company. Liquidation preference helps protect investors by making sure they get their initial investment back before other parties. Preferred stockholders have preference over common stockholders.
- [Liquidation Preference Overhang](https://velawood.com/glossary-term/liquidation-preference-overhang/) - Liquidation Preference Overhang is the extra liquidation preference sometimes inadvertently granted to convertible note holders upon conversion. It arises when a noteholder conversion price is lower than the price per share in the next round, but the noteholder gets a liquidation price per share equal to the next round price.
- [Lock-up Period](https://velawood.com/glossary-term/lock-up-period/) - A Lock-up Period is a mutually agreed upon period of time following an IPO that founders, key employees, and investors are restricted from selling their shares in the company.
- [Material Adverse Change Clause](https://velawood.com/glossary-term/material-adverse-change-clause/) - Material Adverse Change Clause is a contractual provision that states the transaction will not take place if some event occurs. These provisions are found in venture financings.
- [Mergers and Acquisition (M&A)](https://velawood.com/glossary-term/mergers-and-acquisition-ma/) - Mergers and Acquisition (M&A) is a term used to refer to the corporate strategy involved in the consolidation of companies.
- [Micro VC](https://velawood.com/glossary-term/micro-vc/) - A Micro VC is a venture fund with less than $25M in funds.
- [Milestones](https://velawood.com/glossary-term/milestones/) - Milestones are company goals used as incentives for employees or company contracts. If a company reaches certain objectives, it may receive greater funding from an investor or an employee may receive a larger bonus.
- [Monthly Recurring Revenue (MRR)](https://velawood.com/glossary-term/monthly-recurring-revenue-mrr/) - Monthly Recurring Revenue (MRR) is the amount of revenue a company generates from recurring payments in a single month.
- [Multiples](https://velawood.com/glossary-term/multiples/) - Multiples is a valuation method of companies. A company's value will be expressed by multiplying certain metrics like net income or revenue and comparing them against what public and private companies' values were with similar multiples. If a similar public or private company is worth a certain multiple times revenue, then the company's value will
- [Major Investors](https://velawood.com/glossary-term/major-investors/) - Major Investors are investors who own a large portion of a company's shares and as such receive preferential rights. The amount of shares necessary to become a major investor varies among financial documents and companies.
- [Majority Shareholder](https://velawood.com/glossary-term/majority-shareholder/) - A Majority Shareholder is a shareholder who owns more shares in the company than any other shareholder.
- [Management Fee](https://velawood.com/glossary-term/management-fee/) - The Management Fee is a fee charged by fund managers to investors for the management of the investments. Most VC management fees are two to three percent of the total amount of the fund's capital commitment.
- [Management Rights](https://velawood.com/glossary-term/management-rights/) - Management Rights are often required by an investor as part of the terms of an investment into a startup, usually in order to satisfy certain ERISA requirements. Management rights may be comprised of certain information and inspection rights, board observation rights, and a range of discretion regarding involvement in the core management rights and operational
- [Mandatory Redemption](https://velawood.com/glossary-term/mandatory-redemption/) - Mandatory Redemption is an investor right to require a company to repurchase some or all of his or her shares at a future date for a given price.
- [National Venture Capital Association (NVCA)](https://velawood.com/glossary-term/national-venture-capital-association-nvca/) - The National Venture Capital Association (NVCA) is a venture trade association that pools resources and fosters innovation.
- [Non-Accredited Investor](https://velawood.com/glossary-term/non-accredited-investor/) - A Non-Accredited Investor is an investor who fails Rule 501 of Regulation D of the SEC's accredited investor test. In other words, the investor has less than a million dollars in net worth a receives less than $200,000 a year (or $300,000 with a spouse) in income. Many states' Blue Sky laws place limits on
- [Non-Voting Stock](https://velawood.com/glossary-term/non-voting-stock/) - Non-Voting Stock is stock without voting rights. Issuing non-voting stock allows the company to raise capital without giving up decision making power or control to new investors.
- [Offering Documents](https://velawood.com/glossary-term/offering-documents/) - Offering Documents are the documents that are involved with the sale of a startup's securities (see Private Placement). These documents include various agreements specifying the rights of all parties involved, the risks associated with the sale, an agreement for the purchaser to buy the securities, as well as other documents related to each side's rights
- [Option Plan](https://velawood.com/glossary-term/option-plan/) - An Option Plan is a plan created by a company to issue stock options to its employees and service providers.
- [Option Pool](https://velawood.com/glossary-term/option-pool/) - An Option Pool is a group of shares reserved by the company for long-term compensation to management and employees.
- [Narrow-Based Weighted Average](https://velawood.com/glossary-term/narrow-based-weighted-average/) - The Narrow-Based Weighted Average is an anti-dilution protection for equity holders. If equity is sold at a lower price than the price an investor paid previously, the price the investor previously paid is discounted. The price the investor originally paid and the new lower price are put into a weighted average formula. It is called
- [Non-Disclosure Agreement (NDA)](https://velawood.com/glossary-term/non-disclosure-agreement-nda/) - A Non-Disclosure Agreement (NDA), also known as a confidentiality agreement, is a contract in which a party agrees to protect confidential information from disclosure to other parties. Be leery of asking investors to sign NDAs; they see too many deals and chances are that your startup is not unique.
- [Non-Solicitation Agreement](https://velawood.com/glossary-term/non-solicitation-agreement/) - Non-Solicitation Agreements are usually in employment agreements to prevent the contracting employee from soliciting the company's other employees and the company's customers for a competing business venture.
- [No-Shop Clause](https://velawood.com/glossary-term/no-shop-clause/) - A No-Shop Clause is a provision in an agreement, usually a letter of intent or term sheet, whereby the parties agree not to pursue an investment or deal with any third parties for a set period of time.
- [Newco](https://velawood.com/glossary-term/newco/) - Newco is a name given to a hypothetical company for ease of description before the company actually has a name. Well, other than the few companies actually named Newco. Yes. They exist. We checked.
- [Next Level](https://velawood.com/glossary-term/next-level/) - Next Level is the startup community's highest acclaim or stamp of approval for new products or developments.
- [Ninja](https://velawood.com/glossary-term/ninja/) - A Ninja is a smart and talented person with a specific set of skills.
- [No-Action Letter](https://velawood.com/glossary-term/no-action-letter/) - A No-Action Letter is a letter from the SEC that states the startup's anticipated action most likely will not result in enforcement action by the SEC. A startup who does not know if its service or product will break federal securities laws should request a No-Action Letter.
- [Non-Compete Agreement](https://velawood.com/glossary-term/non-compete-agreement/) - A Non-Compete is an agreement signed by employees and management prohibiting the individual from working for or forming a competing company. Non-competes include a specified geographic region and last for a specified time period after termination.
- [Non-Qualified Stock Option (NQSO or NSO)](https://velawood.com/glossary-term/non-qualified-stock-option-nqso-or-nso/) - A Non-Qualified Stock Option (NQSO or NSO) is a stock option that does not qualify for treatment as an incentive stock option under the Internal Revenue Code. Accordingly, when the option is exercised, the holder will pay ordinary income tax on the difference between the exercise price and the grant price.
- [Offering Memorandum](https://velawood.com/glossary-term/offering-memorandum/) - An Offering Memorandum is a legal document drafted by startups to provide details of an investment round to potential investors. See Private Placement Memorandum (PPM).
- [Operating Cash Flow](https://velawood.com/glossary-term/operating-cash-flow/) - Operating Cash Flow is a company's cash flow from operating the business, and not from investments or raising capital. It is calculated as net operating income plus depreciation.
- [Outstanding Shares](https://velawood.com/glossary-term/outstanding-shares/) - Outstanding Shares refers to the number of shares that a company has issued to shareholders (including founders, investors, advisors, and option holders).
- [Overhang](https://velawood.com/glossary-term/overhang/) - Overhang is when preferred stock shareholders' liquidation preference is greater than the amount of proceeds the company receives for liquidation. If there is overhang, none of the proceeds will be disbursed to the common shareholders.
- [Oversubscription](https://velawood.com/glossary-term/oversubscription/) - Oversubscription occurs in any offering of securities when the demand for those securities exceeds the maximum size of the offering. When an offering becomes oversubscribed, investors can either elect to accept an allocation that is a reduced percentage of their original ask or withdraw from the investment all together.
- [Paid-In Capital](https://velawood.com/glossary-term/paid-in-capital/) - Paid-In Capital is the aggregate amount of capital received in return for the sale of equity in the company.
- [Par Value](https://velawood.com/glossary-term/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 $0.0001.
- [Pari Passu](https://velawood.com/glossary-term/pari-passu/) - Pari Passu is a Latin phrase meaning "Equal Footing." Pari Passu refers to the equal treatment of multiple parties without any display of preference.
- [Partnership](https://velawood.com/glossary-term/partnership/) - 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 through taxation. Partnerships are rarely intentionally created now because of other limited liability options that
- [Pass Through Entity](https://velawood.com/glossary-term/pass-through-entity/) - 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 companies.
- [Pay-to-Play](https://velawood.com/glossary-term/pay-to-play/) - 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.
- [Perpetual Warrant](https://velawood.com/glossary-term/perpetual-warrant/) - 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 theoretically last forever.
- [Piggy-Back Rights](https://velawood.com/glossary-term/piggy-back-rights/) - 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.
- [Placement Agent](https://velawood.com/glossary-term/placement-agent/) - A Placement Agent is an individual or firm that assists venture capital and private equity fund managers in finding institutional investors.
- [Ordinary Income Tax](https://velawood.com/glossary-term/ordinary-income-tax/) - Ordinary Income Tax is a tax on income at rates published by the IRS. Ordinary income tax is generally significantly higher than capital gains tax.
- [Participation Rights](https://velawood.com/glossary-term/participation-rights/) - 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.
- [Patent](https://velawood.com/glossary-term/patent/) - A Patent is an exclusive right granted by a government to manufacture, use, or sell an invention for a certain period of time.
- [Payment in Kind (PIK)](https://velawood.com/glossary-term/payment-in-kind-pik/) - Payment in Kind (PIK) securities are securities that distribute dividends in the form of equity or other property rather than cash.
- [Pebcak](https://velawood.com/glossary-term/pebcak/) - Pebcak, "Problems Emerge Between Chair and Keyboard," is a sardonic programmer term for what happens when users are too dumb to use software correctly.
- [PIK Dividend](https://velawood.com/glossary-term/pik-dividend/) - A PIK Dividend is a dividend paid in the form of additional stock to a stockholder, usually preferred stock. PIK means payment in kind.
- [Pitch Deck](https://velawood.com/glossary-term/pitch-deck/) - A Pitch Deck is a brief presentation used to provide investors with a quick overview of a business plan.
- [Post-Money Valuation](https://velawood.com/glossary-term/post-money-valuation/) - 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](https://velawood.com/glossary-term/preemptive-rights/) - 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.
- [Preferred Return](https://velawood.com/glossary-term/preferred-return/) - 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](https://velawood.com/glossary-term/pre-money-shares/) - 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.
- [Pre-Money Valuation](https://velawood.com/glossary-term/pre-money-valuation/) - A Pre-Money Valuation is a company's value before it has received any investment. The pre-money valuation determines how much equity an investor can purchase in the company for its investment.
- [Prepayment](https://velawood.com/glossary-term/prepayment/) - Prepayment is the payment in full of an obligation before the maturity date of the obligation.
- [Private Placement](https://velawood.com/glossary-term/private-placement/) - A Private Placement is a private sale of securities to a small number of investors. Most sales of securities must be registered with the SEC, but many private placements fall within several exemptions to SEC Rules.
- [Private Placement Memorandum (PPM)](https://velawood.com/glossary-term/private-placement-memorandum-ppm/) - A Private Placement Memorandum (PPM) is a document to raise capital that provides potential investors with information about the type of investment, the company's financial health as illustrated by financial statements, the risks associated with the investment, and the company's objectives during the term of the investment.
- [Pro Forma](https://velawood.com/glossary-term/pro-forma/) - Pro Forma is generally a financial statement or cap table provided to investors that shows the company's financial structure or capitalization structure if certain assumptions are accepted as true.
- [Portfolio Company](https://velawood.com/glossary-term/portfolio-company/) - A Portfolio Company is a company that is part of a venture capital or private equity fund's investment portfolio.
- [Preference](https://velawood.com/glossary-term/preference/) - Preference is having a priority over other shareholders, usually regarding distributions in the form of dividends and proceeds from the sale of a company.
- [Preferred Stock](https://velawood.com/glossary-term/preferred-stock/) - 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.
- [Price Cap](https://velawood.com/glossary-term/price-cap/) - 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.
- [Price Per Share](https://velawood.com/glossary-term/price-per-share/) - 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 price per share.
- [Primary Shares](https://velawood.com/glossary-term/primary-shares/) - Primary Shares are a company's shares sold by the company rather than by shareholders.
- [Private Company](https://velawood.com/glossary-term/private-company/) - A Private Company is a company whose shares are privately sold and owned and are not traded on a public market. Unlike public companies, private companies' stock is often owned by a few shareholders.
- [Private Equity](https://velawood.com/glossary-term/private-equity/) - Private Equity is equity capital that is not quoted on a public exchange and refers to investments in private companies.
- [Private Offering](https://velawood.com/glossary-term/private-offering/) - A Private Offering is a company selling its securities to private-accredited investors without registering the securities with the SEC.
- [Profits Interest Plan](https://velawood.com/glossary-term/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 future profits of the company after the date of the grant (hence, incentive units are
- [Promissory Note](https://velawood.com/glossary-term/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.
- [Qualified Financing](https://velawood.com/glossary-term/qualified-financing/) - A Qualified Financing is a threshold amount of financing raised that triggers the conversion of a convertible note into equity. The conversion may be automatic or optional.
- [Qualified IPO](https://velawood.com/glossary-term/qualified-ipo/) - A Qualified IPO is an IPO that is being sold at a price and value greater than the contemplated value in the financing documents.
- [Recapitalization](https://velawood.com/glossary-term/recapitalization/) - A Recapitalization is a change in a startup's capital structure to an optimal mix of debt and equity. A company often must exchange one form of security for another.
- [Recurring Revenue](https://velawood.com/glossary-term/recurring-revenue/) - Recurring Revenue is the measure of revenue components that are recurring in nature. This excludes one-time (non-recurring) fees and professional service fees.
- [Redemption Right](https://velawood.com/glossary-term/redemption-right/) - A Redemption Right is a right to make a company buy back, or "redeem" stock. A redemption right is typically requested by an investor in conjunction with a financing round.
- [Redline](https://velawood.com/glossary-term/redline/) - A Redline is a document which has been marked up with comments or modifications and has been "redlined" so that the other party can easily identify the changes.
- [Promote](https://velawood.com/glossary-term/promote/) - See Carried Interest.
- [Proprietary Rights](https://velawood.com/glossary-term/proprietary-rights/) - Proprietary Rights are property rights that only the owners of the property possess.
- [Prospectus](https://velawood.com/glossary-term/prospectus/) - A Prospectus is used to solicit potential investors in the sale of securities. Prospectuses often include pertinent information including the company's business plan, capitalization structure, management structure, and information about the securities being sold. The SEC rules or a state's securities laws may require the prospectus to be filed as part of the registration process.
- [Protective Provisions](https://velawood.com/glossary-term/protective-provisions/) - Protective Provisions are provisions in financing docs which grant an investor (typically a preferred investor) certain rights. Typically the provisions give investors board rights or the right to veto certain board or company actions.
- [Proxy Voting](https://velawood.com/glossary-term/proxy-voting/) - Proxy Voting is the delegation of a shareholder's voting rights to another shareholder. Shareholders may request the right to vote other shareholders' votes to pass corporate actions, or alternatively, shareholders who are unable to attend a shareholder meeting may allow another shareholder to vote their shares.
- [Public Company](https://velawood.com/glossary-term/public-company/) - A Public Company is a corporation whose securities are traded on a public exchange. These securities must be registered with the SEC.
- [Public Offering](https://velawood.com/glossary-term/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.
- [Purchase Agreement](https://velawood.com/glossary-term/purchase-agreement/) - A Purchase Agreement is an agreement that memorializes the sale and purchase of property. Startups are often involved in many purchase agreements, including Asset Purchase Agreements, Membership Interest Purchase Agreements, Stock Purchase Agreements, Equity Purchase Agreements, etc.
- [Quiet Period](https://velawood.com/glossary-term/quiet-period/) - A Quiet Period or (waiting period) is a time period where a company cannot release certain information without violating federal security laws. The period is the time between when a registration statement is filed and when the registration is approved by the SEC.
- [Quorum](https://velawood.com/glossary-term/quorum/) - Quorum is the amount of shareholders whose presence or proxy is necessary at a meeting in order to take corporate action.
- [Ratchet](https://velawood.com/glossary-term/ratchet/) - A Ratchet is an anti-dilution protection that, in a down round, allows an investor to adjust the price it paid to prevent all or some of the dilution by maintaining the same percentage or a slightly lower percentage of ownership in the company.
- [Pro-Rata](https://velawood.com/glossary-term/pro-rata/) - 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 company, he/she will have the ability to buy 5% of the securities in the new
- [Put Right](https://velawood.com/glossary-term/put-right/) - A Put Right is a purchased option to sell a certain amount of a security at a fixed price back to the option seller before a certain date.
- [Regulation D Rule 504](https://velawood.com/glossary-term/regulation-d-rule-504/) - Regulation D Rule 504 provides an exemption for the offer and sale of up to $5,000,000 of securities in a 12-month period. General offering and solicitations are permitted under this rule as long as they are in accordance with state law and restricted to accredited investors. Rule 504 allows companies to sell securities that are
- [Regulation D Rule 505](https://velawood.com/glossary-term/regulation-d-rule-505/) - Regulation D Rule 505 provides an exemption for offers and sales of securities totaling up to $5 million in any 12-month period. Under this exemption, securities may be sold to an unlimited number of "accredited investors" and up to 35 "nonaccredited investors," who do not need to satisfy the sophistication or wealth standards associated with
- [Representations and Warranties](https://velawood.com/glossary-term/representations-and-warranties/) - Representations and Warranties are certifications of certain important facts by a party to an agreement to the other party to the agreement.
- [Regulation D Rule 506](https://velawood.com/glossary-term/regulation-d-rule-506/) - Regulation D Rule 506 is a "safe harbor" for the private offering exemption. Under this rule, companies can raise an unlimited amount of capital to an unlimited number of accredited investors and up to 35 other purchasers. Also, subject to certain restrictions, the company may use general solicitation or advertising to market the securities. Unlike
- [Reserved Shares](https://velawood.com/glossary-term/reserved-shares/) - Reserved Shares are company shares that are reserved for some internal purpose and will not be issued to shareholders. Some shares are required to be reserved. For example, if a company issues preferred stock, the company must reserve enough shares for the preferred stock to convert into common shares.
- [Restricted Stock](https://velawood.com/glossary-term/restricted-stock/) - Restricted Stock is ownership shares of a corporation that are unregistered. Because these shares are unregistered, the stock is non-transferable and can only be transferred in compliance with certain SEC regulations. Restricted stock is most commonly granted to executives, directors, and founders of the company. In an LLC, restricted units are the functional equivalent of
- [Restricted Stock Purchase Agreement (RSPA)](https://velawood.com/glossary-term/restricted-stock-purchase-agreement-rspa/) - A Restricted Stock Purchase Agreement (RSPA) is an agreement issuing restricted stock. RSPAs are typically granted to founders to prevent the founder from leaving the company prematurely and taking a lot of the ownership with her. The RSPA establishes when the shares will fully vest and belong to the founder. Typically, the RSPA will vest
- [Repurchase Option](https://velawood.com/glossary-term/repurchase-option/) - A Repurchase Option is a company's right to buy a shareholder's stock upon some condition. Often, founders' shares have a repurchase option if the founder leaves the company within a certain amount of time.
- [Regulation D Rule 501](https://velawood.com/glossary-term/regulation-d-rule-501/) - Regulation D Rule 501 is where the definitions are listed in Regulation D.
- [Regulation D Rule 502](https://velawood.com/glossary-term/regulation-d-rule-502/) - Regulation D Rule 502 refers to the section of Regulation D that explains how Regulation D works.
- [Regulation D Rule 503](https://velawood.com/glossary-term/regulation-d-rule-503/) - Regulation D Rule 503 requires companies (the "issuers") to file a Form D with the SEC in certain situations and is usually applicable to venture offerings.
- [Return on Investment](https://velawood.com/glossary-term/return-on-investment/) - Return on Investment is the percentage of proceeds received by an investor as a result of an investment.
- [Revenue](https://velawood.com/glossary-term/revenue/) - Revenue is money that is brought into a company by its business activities (typically from sales).
- [Reverse Dilution](https://velawood.com/glossary-term/reverse-dilution/) - Reverse Dilution is a term used to describe when some shareholders' stock is repurchased by a company and the company's remaining shareholders' ownership percentage is increased.
- [Registered Agent](https://velawood.com/glossary-term/registered-agent/) - A Registered Agent is the official "contact person" for a business. A business must officially designate a registered agent to receive and accept any lawsuits, notices, or other legal documents on behalf of the entity. Texas requires every entity to assign a registered agent before it is authorized to conduct business within the state.
- [Registration](https://velawood.com/glossary-term/registration/) - Registration is the process of notifying the SEC that the company plans to sell shares to the public and to register the shares with the SEC under the Securities Act of 1933.
- [Registration Rights](https://velawood.com/glossary-term/registration-rights/) - A Registration Right entitles an investor who owns preferred stock the ability to require the company to list its shares on a public exchange. This is so that the investor can sell them on an open market and be able to liquidate her investment.
- [Regulation A+](https://velawood.com/glossary-term/regulation-a/) - Regulation A+ is a newly revamped securities regulation exemption that consists of 2 tiers: Tier 1, which would consist of securities offerings of up to $20 million in a 12-month period, with no more than $6 million in offers by selling security-holders that are affiliates of the issuer; and Tier 2, which would consist of
- [Regulation CF](https://velawood.com/glossary-term/regulation-cf/) - Regulation CF is the set of rules and forms that implements crowdfunding.
- [Regulation D (Reg D)](https://velawood.com/glossary-term/regulation-d-reg-d/) - Under the Securities Act of 1933, any offer to sell securities must either be registered with the SEC or meet an exemption. The exemptions are commonly known as Regulation D, and the '33 Act contains three rules (Rule 504, Rule 505, Rule 506) which provide exemptions from the registration requirement, allowing some companies to offer
- [Rollup](https://velawood.com/glossary-term/rollup/) - A Rollup is an acquisition or merger of a smaller company by a larger company in the same market. The larger companies often purchase the smaller companies to optimize their production and distribution channels.
- [Runway](https://velawood.com/glossary-term/runway/) - Runway refers to the amount of time until a startup goes out of business, assuming current income and expenses stay constant. Usually, the more capital received through financing, the longer the runway for a startup.
- [Sarbanes-Oxley Act](https://velawood.com/glossary-term/sarbanes-oxley-act/) - The Sarbanes-Oxley Act was passed in 2002, largely in response to a number of significant corporate scandals, including Enron and WorldCom. The Act works to protect investors from fraudulent accounting activities and other problematic practices by corporations. You'll also hear it called "SOX" or "Sarbox."
- [Scale-Down](https://velawood.com/glossary-term/scale-down/) - A Scale-Down is when a fund manager's fee is reduced at a scheduled rate as the fund is reducing its investment activity.
- [Reverse Stock Split](https://velawood.com/glossary-term/reverse-stock-split/) - A Reverse Stock Split is a corporate action by which a company reduces the number of outstanding shares. You may also hear it called a "stock consolidation" or a "share rollback."
- [Reverse Vesting](https://velawood.com/glossary-term/reverse-vesting/) - Reverse Vesting is when founders receive all their shares and rights in those shares up front, but the shares are subject to repurchase by the company if the founder leaves. Then, the vesting schedule details that the longer the founder stays with the company the more shares vest and are safe from repurchase if the
- [Right of First Refusal (ROFR)](https://velawood.com/glossary-term/right-of-first-refusal/) - The Right of First Refusal (ROFR) is a contractual right for companies to purchase any shares that shareholders want to sell before the shares are offered to outside buyers.
- [Right of Rescission](https://velawood.com/glossary-term/right-of-rescission/) - The Right of Rescission is a shareholder's right to rescind its investment agreement forcing the company to return the investor's investment in full in exchange for the company's shares.
- [Rights of Co-Sale with Founders](https://velawood.com/glossary-term/rights-of-co-sale-with-founders/) - Rights of Co-Sale with Founders is a clause VC funds often want in investment agreements because it allows the fund to sell its shares at the same time as founders if the founders choose to sell their shares.
- [Risk Tolerance](https://velawood.com/glossary-term/risk-tolerance/) - Risk Tolerance is the level of risk an investor is comfortable with as the investor seeks investments.
- [Road Show](https://velawood.com/glossary-term/road-show/) - A Road Show is a company presenting its pitch deck in many cities attempting to raise capital.
- [Round](https://velawood.com/glossary-term/round/) - A Round is a financing event by which startups obtain investment, generally from family and friends, angel investors, or venture capitalists. The round is the entire set of investors in a particular offering or class of equity.
- [Royalties](https://velawood.com/glossary-term/royalties/) - Royalties are fees paid to a property owner for the use of its property. Royalties are typically paid for the use of intellectual property.
- [Rule 144](https://velawood.com/glossary-term/rule-144/) - Rule 144 is an exemption from SEC registration that allows all sellers to resale registered or unregistered securities through public markets if certain requirements are met.
- [Rule 145](https://velawood.com/glossary-term/rule-145/) - Rule 145 is an SEC registration exemption which exempts shares acquired in a merger, acquisition, or consolidation from registration prior to the sale.
- [Rule 701](https://velawood.com/glossary-term/rule-701/) - Rule 701 is a broad federal securities registration exemption in the Securities Act of 1933 which exempts equity incentive securities if the securities are granted through a written agreement and in accordance with a written plan.
- [Safe Harbor](https://velawood.com/glossary-term/safe-harbor/) - A Safe Harbor is a series of actions a company can follow that guarantees the company will not be punished for those actions. Safe harbors are usually created in regard to rules that don't have a consistent application.
- [Scalability](https://velawood.com/glossary-term/scalability/) - Scalability is whether a company's product and operations can be successful at growing quickly and operating at a much larger scale.
- [Scale-Up](https://velawood.com/glossary-term/scale-up/) - A Scale-Up is when a startup believes it can rapidly accelerate the growth of the company and receive positive returns.
- [Secondary Buyout](https://velawood.com/glossary-term/secondary-buyout/) - A Secondary Buyout is a private sale by a VC or private equity firm of its stake in a startup (or part or all of its entire portfolio) to another VC or private equity firm. See Tender Offer.
- [Secondary Sale](https://velawood.com/glossary-term/secondary-sale/) - A Secondary Sale is a sale where a buyer purchases shares of a startup directly from the startup's existing shareholders. This type of transaction allows founders and early-stage investors to take some money off the table.
- [Secondary Shares](https://velawood.com/glossary-term/secondary-shares/) - Secondary Shares are shares sold by a shareholder to a third party rather than shares sold by a corporation.
- [Securities and Exchange Commission (SEC)](https://velawood.com/glossary-term/securities-and-exchange-commission-sec/) - The Securities and Exchange Commission (SEC) is the federal regulatory agency that enforces federal securities laws (such as Sarbanes-Oxley, the Securities Act of 1933, the Securities Exchange Act of 1934, and other securities regulation), proposes rules for the regulation of securities, and regulates the nation's stock and option exchanges. The SEC works to maintain fair,
- [Security Interest](https://velawood.com/glossary-term/security-interest/) - A Security Interest is a legal right in collateral given to a creditor. If the debtor fails to fulfill its obligations to the creditor, the creditor can force the sale of the collateral and collect what it is owed from the debtor.
- [Seed Capital](https://velawood.com/glossary-term/seed-capital/) - Seed Capital is very early-stage financing for a startup with a business venture or idea that has not yet been established. Capital is usually provided by angels and/or friends and family, though a small number of venture capitalists do provide seed capital.
- [Seed Stage](https://velawood.com/glossary-term/seed-stage/) - The Seed Stage is the initial stage in the life of a startup where a startup looks to establish its business venture or idea using seed capital. A Seed Stage round is sometimes referred to as a Series AA round.
- [Seniority](https://velawood.com/glossary-term/seniority/) - Seniority means a senior interest or debt has a higher priority than a junior interest or debt.
- [Search Fund](https://velawood.com/glossary-term/search-fund/) - A Search Fund is a pool of capital raised to support an entrepreneur (usually with a proven track record or a recent MBA graduate) in finding and acquiring a private company with the objective of streamlining operational inefficiencies and growing the business.
- [Secondary Market](https://velawood.com/glossary-term/secondary-market/) - The Secondary Market is the financial market in which investors can purchase financial instruments (stocks, bonds, options, futures) that have previously been issued to other investors; investors purchase securities from each other, rather than directly from the issuing company. The secondary market is sometimes also referred to as "the aftermarket."
- [Secured Debt](https://velawood.com/glossary-term/secured-debt/) - Secured Debt is debt that guarantees some repayment because it is tied to some or all of a company's assets as collateral. If the debtor defaults, the creditor can obtain a lien against the collateral.
- [Securities Act of 1933](https://velawood.com/glossary-term/securities-act-of-1933/) - The Securities Act of 1933 was the first federal legislation regarding the registration of the sale of securities. The Act's extensive registration and disclosure requirements allow potential investors to have all relevant information needed to make informed investments.
- [Securities Exchange Act of 1934](https://velawood.com/glossary-term/securities-exchange-act-of-1934/) - The Securities Exchange Act of 1934 regulates the sale of securities on secondary markets. The Act created the SEC and tasked it with regulating the securities markets. In order to protect investors and to provide transparency, stock exchange markets, brokerage companies and broker dealers, transfer agents, and companies wishing to sell securities all must register
- [Security](https://velawood.com/glossary-term/security/) - A Security is used to describe a tradable asset of any kind and generally represents an interest of equity in a company. Stock, membership units, and convertible notes are all forms of a security.
- [Seed Preferred](https://velawood.com/glossary-term/seed-preferred/) - Seed Preferred is a round of financing before a series seed that is not quite as large as a true seed round, and therefore the investors do not receive the same rights as seed investors.
- [Senior Debt](https://velawood.com/glossary-term/senior-debt/) - Senior Debt is debt that will be paid back before any other debt. It is said to be "senior" to other junior debt that has a lower priority in regard to proceed distributions from a liquidation event.
- [Senior Securities](https://velawood.com/glossary-term/senior-securities/) - Senior Securities are securities that receive proceeds from a liquidation event before other of the company's securities.
- [Series A Preferred Stock](https://velawood.com/glossary-term/series-a-preferred-stock/) - Series A Preferred Stock is the class of stock that is issued to investors in a Series A round. The stock is preferred because it contains certain rights superior to the company's common stock, commonly liquidation preference, anti-dilution protection, and control rights.
- [Series AA Round](https://velawood.com/glossary-term/series-aa-round/) - A Series AA Round is a round of startup financing using a class of preferred stock called the "Series AA Preferred Shares." Series AA is also known as "Seed" because it comes before Series A. Series AA terms are usually not as onerous as Series A terms, and the valuation is typically lower.
- [Shell Corporation](https://velawood.com/glossary-term/shell-corporation/) - A Shell Corporation is a corporation that does not have any significant assets or ongoing business. Most commonly, shell corporations are tools utilized to effect mergers, raise funds, or even conduct a hostile takeover. Additionally, although not illegal, shell corporations are sometimes used to disguise business ownership in illegitimate ways.
- [Slack](https://velawood.com/glossary-term/slack/) - Slack is the go-to communications tool for startups. We highly recommend it.
- [Small Business Administration (SBA)](https://velawood.com/glossary-term/small-business-administration-sba/) - The Small Business Administration (SBA) is a government agency that provides support to small businesses. The mission of the SBA is "to maintain and strengthen the nation's economy by enabling the establishment and viability of small businesses and by assisting in the economic recovery of communities after disasters."
- [Small Business Innovation Research Program](https://velawood.com/glossary-term/small-business-innovation-research-program/) - The Small Business Innovation Research Program, run by the Small Business Administration, encourages domestic small businesses to engage in Federal Research/Research and Development (R/R&D) that has the potential for commercialization. Each year, federal agencies with extramural R&D budgets that exceed $100 million are required to allocate 2.8 percent of their R&D budget to these programs.
- [Small Business Investment Company (SBIC)](https://velawood.com/glossary-term/small-business-investment-company-sbic/) - A Small Business Investment Company (SBIC) is a private company that is licensed by the Small Business Administration to invest in small businesses' debt and equity offerings. As part of the SBIC program and through the SBA, SBICs often receive some government funding to foster long-term capital flow into America's small businesses.
- [Sole Proprietor and Sole Proprietorship](https://velawood.com/glossary-term/sole-proprietor-and-sole-proprietorship/) - A Sole Proprietor is an individual who undertakes to engage in business without partners and without organizational forethought. This does not mean that you have one person, but that you have one owner. There is almost never a reason to operate as a sole proprietorship, as a sole proprietorship does not offer the liability protection
- [Special Purpose Vehicle (SPV)](https://velawood.com/glossary-term/special-purpose-vehicle-spv/) - A Special Purpose Vehicle (SPV) is generally a subsidiary of a larger corporation with an asset/liability structure and legal status that makes its obligations secure even if the parent company goes bankrupt. An SPV may also be formed for the purpose of a specific investment or acquisition. SPVs may also be referred to as "Single
- [Staggered Board](https://velawood.com/glossary-term/staggered-board/) - A Staggered Board refers to a board of directors whereby the individual terms to not end coterminously with the others, but rather the directors are "staggered" such that a fraction of them are changing each year.
- [Startup](https://velawood.com/glossary-term/startup/) - A Startup is a newly formed company. The term can refer to any entity structure and references the company's life cycle. A startup will generally seek outside capital and plan for a rapid growth trajectory.
- [Stock Options](https://velawood.com/glossary-term/stock-options/) - Stock Options are an option to purchase a fixed amount of shares at a fixed price that typically vest over time.
- [Stock Plan](https://velawood.com/glossary-term/stock-plan/) - A Stock Plan is a company's equity compensation plan. The company issues equity through Incentive Stock Options, Non-Qualified Stock Options, or Restricted Stock Agreements. The incentives are usually tied to achieving a goal or staying with the company for some period of time.
- [Series A Round](https://velawood.com/glossary-term/series-a-round/) - A Series A Round is generally the first significant capital funding event taken on by a startup, usually after that startup has raised some initial capital through a Friends and Family round, Seed round, or both. In a Series A round, the stock issued will typically be preferred stock designated as Series A stock. You
- [Series B Round](https://velawood.com/glossary-term/series-b-round/) - A Series B Round comes after a Series A round of financing. The Series B round financing can be done at a valuation higher, lower, or equal to the Series A valuation, but hopefully much higher.
- [Series LLC](https://velawood.com/glossary-term/series-llc/) - A Series LLC is a type of limited liability company that provides liability protection and tax advantages across a series of LLCs, each of which is protected from the liabilities arising from the other LLCs within the same series.
- [Shareholders' Agreement (SHA)](https://velawood.com/glossary-term/shareholders-agreement-sha/) - A Shareholders' Agreement (SHA) is an agreement among a company's shareholders that sometimes exists in startups. While most of the shareholders' rights are laid out in the formation documents, the shareholder agreement may supplement these documents and further provide how the shareholders will vote, solve disputes, and other rights.
- [Side Letter](https://velawood.com/glossary-term/side-letter/) - A Side Letter is an agreement between a company and a specific investor that alters the terms of the offering documents for that investor only, typically by providing the investor with additional rights or excluding the investor from certain obligations.
- [Single Trigger Acceleration](https://velawood.com/glossary-term/single-trigger-acceleration/) - Single Trigger Acceleration is the partial or full acceleration of vesting of an employee's options or stock based on the occurrence of a single, specified event, typically a change of control of the company.
- [Spinoff](https://velawood.com/glossary-term/spinoff/) - A Spinoff is a type of divestiture in which a division or subsidiary is separated from its parent firm to create a new corporate entity by issuing new shares. These shares are distributed to the current stockholders (shareholders) in proportion to their current shareholdings and may also be sold to the public.
- [Stacked Preference](https://velawood.com/glossary-term/stacked-preference/) - A Stacked Preference is when a company has raised several series of financing each and one or more series has greater liquidation preference rights than another series.
- [Tranche](https://velawood.com/glossary-term/tranche/) - Tranche is financing by investors where money is typically invested over two or three milestones based on the progress of the company.
- [Stockholders' Consent](https://velawood.com/glossary-term/stockholders-consent/) - Stockholders' Consent is when some corporate actions such as the sale of the company require the stockholders to consent to the company taking such action.
- [Strategic Investor](https://velawood.com/glossary-term/strategic-investor/) - A Strategic Investor is generally a company who makes an investment in a startup primarily for a strategic business reason, in addition to the potential for financial gain.
- [Strike Price](https://velawood.com/glossary-term/strike-price/) - The Strike Price is a fixed price that option holders must pay when exercising their stock options.
- [Subscription Agreement](https://velawood.com/glossary-term/subscription-agreement/) - A Subscription Agreement is the investment agreement for a startup. This is because the investor is "subscribing" into a round. It is similar (sometimes identical) to a stock purchase agreement.
- [Tag Along Rights](https://velawood.com/glossary-term/tag-along-rights/) - Tag Along Rights are contractual obligations protecting minority shareholders and are most common in venture capital deals. An illustration of how tag along rights work is when a majority shareholder sells his or her portion of the company and minority shareholders have a contractual right to join the transaction and sell their minority stakes in
- [Trade Secret](https://velawood.com/glossary-term/trade-secret/) - A Trade Secret is any confidential business information which provides a competitive advantage. Trade secrets are often protected by contract law but are also protected by federal and state statutes. Examples of trade secrets include sales methods, distribution methods, advertising strategies, client lists, and formulas.
- [Turnaround](https://velawood.com/glossary-term/turnaround/) - A Turnaround is an increase in a company's financial metrics after adopting a new strategy. Companies may experience increases in revenue, profit, or goodwill.
- [Stock Purchase Agreement](https://velawood.com/glossary-term/stock-purchase-agreement/) - A Stock Purchase Agreement is a legally binding contract whereby a purchaser (oftentimes an investor) agrees to purchase shares of a company in exchange for consideration. The consideration is almost always cash, but it could be services or a promissory note, or an exchange of some kind.
- [Stock Split](https://velawood.com/glossary-term/stock-split/) - A Stock Split is when a company divides its shares into additional shares. The total value of the shares remains the same, but each shareholder will own two or three times more shares.
- [Stockholder](https://velawood.com/glossary-term/stockholder/) - A Stockholder is the same thing as a "shareholder," or the owner of stock (a.k.a shares) of a corporation. Stockholders can be individuals or entities.
- [Subordinated Debt](https://velawood.com/glossary-term/subordinated-debt/) - Subordinated Debt is debt that ranks lower in priority than another particular debt if a company falls into bankruptcy or has to liquidate. You may also see it referred to as "junior debt," a "junior security," or a "subordinated loan."
- [Super Majority](https://velawood.com/glossary-term/super-majority/) - A Super Majority is a designated percentage (usually 67%) required to take certain actions - usually major decisions like selling the company.
- [Sweat Equity](https://velawood.com/glossary-term/sweat-equity/) - Sweat Equity is the ownership interest, or increase in value, that is the direct result of hard work by the startup owner(s). For the startups out there - please do not plan to be paid, or repaid, for your sweat equity. Investors hate that.
- [Syndicate](https://velawood.com/glossary-term/syndicate/) - A Syndicate is a group of unrelated investors who band together for an investment round. The word can also be used as a verb - "syndicate a round."
- [Takeover](https://velawood.com/glossary-term/takeover/) - A Takeover occurs when an acquiring company "takes over" the operations, holdings, and debt of a target company. Takeovers can be hostile, such as when the acquiring company purchases a substantial stake in the target company as soon as the markets open (a "dawn raid"). Alternatively, an acquisition or merger can be a welcome takeover,
- [Tender Offer](https://velawood.com/glossary-term/tender-offer/) - A Tender Offer is an offer by an issuer or a third party to purchase a significant block of existing shares of a publicly or privately traded company.
- [Term Sheet](https://velawood.com/glossary-term/term-sheet/) - A Term Sheet is a document that details the terms and conditions of the financing for an investment opportunity between an investor and a startup. It is usually non-binding. Note that in early stages of financing - Friends & Family and Seed - the company drafts the term sheet. But typically, once you get to
- [Texas Business Organizations Code (TBOC)](https://velawood.com/glossary-term/texas-business-organizations-code-tboc/) - The Texas Business Organizations Code (TBOC) codifies the statutes that govern for-profit and non-profit entities in Texas.
- [Total Contract Value (TCV)](https://velawood.com/glossary-term/total-contract-value-tcv/) - Total Contract Value (TCV) is simply the total value of the contract, including value from any one-time charges, services fees, and recurring charges.
- [UCC Financing Statement](https://velawood.com/glossary-term/ucc-financing-statement/) - A UCC Financing Statement is a legal form that creditors file to provide notice of their interest (current or future) in the personal property of debtors. It specifically details about the pledged collateral, the terms of the loan, and whether the loan is secured or unsecured. You may also see this called a "UCC-1" or
- [Underwater](https://velawood.com/glossary-term/underwater/) - Underwater is an adjective that is used to describe a security whose fair market value today is less than its original issuance or exercise price; in other words, if the security expired today, it would be worthless.
- [Underwriter](https://velawood.com/glossary-term/underwriter/) - An Underwriter is responsible for selling new securities to the public on behalf of companies. Underwriters are traditionally investment banks.
- [Uniform Commercial Code (UCC)](https://velawood.com/glossary-term/uniform-commercial-code-ucc/) - The Uniform Commercial Code (UCC) is a set of model rules drafted to provide uniformity across every state. The UCC primarily covers commercial transactions, such as the sale of goods, property, and secured transactions. The UCC has nine different articles relating to aspects of commercial transactions. States have adopted entire articles, provisions from articles, or
- [Unrelated Business Taxable Income](https://velawood.com/glossary-term/unrelated-business-taxable-income/) - Unrelated Business Taxable Income is income generated by a tax-exempt entity through taxable activities that are essential to generate income for the entity but not related to the entity's main function. Such income is not exempt from income tax. You may hear it referred to as "UBTI."
- [Unsecured Debt](https://velawood.com/glossary-term/unsecured-debt/) - Unsecured Debt is debt that is not backed by collateral in any of the assets of a company. Because the debt is not secured by any specific assets as collateral, any debt secured by specific collateral will take priority over the unsecured debt in the event of dissolution of the startup and sale of its
- [Valuation](https://velawood.com/glossary-term/valuation/) - Valuation is the process of determining a company's worth. Valuations can be determined as multiplies of the company's metrics or comparisons to other companies that recently valued at certain amounts.
- [Venture-Backed Startup](https://velawood.com/glossary-term/venture-backed-startup/) - Venture-Backed Startups are startups receiving venture capital funding. Most companies do not receive venture capital in early rounds of financing until they have proved the company is viable.
- [Venture Capital](https://velawood.com/glossary-term/venture-capital/) - Venture Capital is capital provided by investors to startups. Startups are inherently risky due to their likelihood of early failure. Because of the high risk, investors may achieve greater returns.
- [Venture Capital Fund](https://velawood.com/glossary-term/venture-capital-fund/) - Venture Capital Funds are investment funds that invest in startups and seek high returns in exchange for the risky nature of investing in startups.
- [Venture Capitalist (VC)](https://velawood.com/glossary-term/venture-capitalist-vc/) - A Venture Capitalist (VC) is a person whose job is investing in startups - a professional investor, so to speak. Venture capitalists work for venture capital firms.
- [Venture Debt](https://velawood.com/glossary-term/venture-debt/) - Venture Debt is a bank lending to startups. Because startups are so risky, they generally do not qualify for traditional bank loans until much later in their life cycle. There are, however, a handful of banks who will lend to startups as part of a large venture round.
- [Vested](https://velawood.com/glossary-term/vested/) - Vested refers to the amount of equity that a recipient (i.e. an employee) owns and is no longer subject to forfeiture. Typically, stock options "vest" as the employee continues her employment with a startup, meaning that the employee can now exercise the options and own the stock outright.
- [Vesting](https://velawood.com/glossary-term/vesting/) - Vesting is the period of time that securities (usually stock options) may be subject to forfeiture or repurchase based on meeting certain time or milestone criteria. Vesting co-founder equity helps to protect the company's equity - so that a departing co-founder doesn't depart with a lot of equity, but rather only the equity that has
- [Vesting Schedule](https://velawood.com/glossary-term/vesting-schedule/) - A Vesting Schedule is the timeline over which a stock recipient's equity (usually stock options) vests. The typical vesting schedule is four years with a one year cliff. See Four Years with a One Year Cliff.
- [Vintage Year](https://velawood.com/glossary-term/vintage-year/) - Vintage Year is the year a VC fund first started investing.
- [Voting Rights](https://velawood.com/glossary-term/voting-rights/) - Voting Rights are the rights and/or obligations of a shareholder(s) to vote on certain corporate matters.
- [Warrant](https://velawood.com/glossary-term/warrant/) - A 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 before a set expiration time or milestone.
- [Wash-Out Round](https://velawood.com/glossary-term/wash-out-round/) - A Wash-Out Round is a round of financing whereby the founders are so diluted that their voting power becomes minimal, or they are essentially "washed-out."
- [Weighted Average Anti-Dilution](https://velawood.com/glossary-term/weighted-average-anti-dilution/) - Weighted Average Anti-Dilution is an investor protection tool in which a preferred shareholder's conversion price (the price by which preferred shares are converted to common shares) is adjusted in a subsequent financing round to a lower price per share, calculated using the share price and number of shares issued in the new round. The result
- [Weighted Average Cost of Capital (WACC)](https://velawood.com/glossary-term/weighted-average-cost-of-capital-wacc/) - Weighted Average Cost of Capital (WACC) is a formula used to determine a company's cost of capital. The WACC is the sum of the average equity cost and the debt cost after tax. The average is weighted based on the ratio of debt to debt plus equity and equity to equity plus debt.
- [White Label](https://velawood.com/glossary-term/white-label/) - White Label is using a third party's back-end or core technology with your own skin or front-end.
- [Write-Down](https://velawood.com/glossary-term/write-down/) - A Write-Down is a reduction in the reported value of a company or asset.
- [Write-Off](https://velawood.com/glossary-term/write-off/) - A Write-Off is a reduction in a company's or asset's reported value to zero.
- [Zombie](https://velawood.com/glossary-term/zombie/) - A Zombie is a venture-backed company that is nearly terminated, or basically "walking dead." Usually the company is maintaining just enough cash flow to keep the doors open while an acquirer is sought. It's not uncommon for investors to pitch in a little more money so that the company can seek a sale and the
- [Annual Recurring Revenue (ARR)](https://velawood.com/glossary-term/annual-recurring-revenue-arr/) - Annual Recurring Revenue (ARR) is the amount of revenue a company generates from recurring payments over a year.
- [One Deal at a Time](https://velawood.com/glossary-term/one-deal-at-a-time/) - A fund where deals are presented one at a time to the investors and the investors can choose to participate on a deal-by-deal basis. Contrast this with Blind Pool.
- [Committed Fund](https://velawood.com/glossary-term/committed-fund/) - A venture fund that collects all investments from its investors (oftentimes referred to as "limited partners" or "LPs") up front, as opposed to a one deal at a time or capital call structure.
- [Key Performance Indicator (KPI)](https://velawood.com/glossary-term/key-performance-indicator-kpi/) - A key performance indicator is a measurable value that helps a startup measure key business metrics.
- [Capital Raise](https://velawood.com/glossary-term/capital-raise/) - A transaction or series of transactions whereby a startup raises investment dollars (or "capital") to grow the company. Capital raises can be debt, convertible debt, or equity.
- [Zebra](https://velawood.com/glossary-term/zebra/) - Coined by Quartz, a Zebra is an alternative to the business model of a Unicorn. Zebras "balance profit and purpose, champion democracy, and put a premium on sharing power and resources."
- [Unicorn](https://velawood.com/glossary-term/unicorn/) - A Unicorn is a startup company valued at over $1 billion. Canadian tech unicorns are known as narwhals. A decacorn is a word used for those companies over $10 billion, while hectocorn is the appropriate term for such a company valued over $100 billion.
- [Smart Money](https://velawood.com/glossary-term/smart-money/) - Smart Money is investment dollars from professional investors - i.e. venture funds or experienced angel investors.
- [SaaS Business](https://velawood.com/glossary-term/saas-business/) - A SaaS business is one whereby software is licensed to end users from a central location, usually delivered via the web. "SaaS" stands for "software as a service" and customers are generally billed monthly. Microsoft Office 365, Dropbox, Google G Suite, and Slack are all examples of SaaS businesses. Contrast those with the old days
- [](https://velawood.com/glossary-term/4640/) - A Wet Blanket is something that extinguishes excitement or enthusiasm.
- [Indication of Interest (IOI)](https://velawood.com/glossary-term/indication-of-interest/) - An Indication of Interest (IOI) is a preliminary letter sent by a buyer (sometimes an investor) to indicate a basic level of interest. It's one step past "nice to meet you," but well short of a Letter of Intent, and no where close to a binding document. See also Letter of Intent (LOI) or Memorandum
- [Alpha Testing](https://velawood.com/glossary-term/alpha-testing/) - Alpha Testing refers to internally testing a pre-production model of a product, typically on a controlled basis, to work out the kinks without anyone else seeing it.
- [Analyst (VC Firm)](https://velawood.com/glossary-term/analyst-vc-firm/) - An Analyst is a very junior person at a venture capital firm, often a recent college graduate.
- [Associate (VC Firm)](https://velawood.com/glossary-term/associate-vc-firm/) - An Associate is a person at a venture capital firm who is involved in deal analysis and management. The seniority of this position varies by firm, but generally associates need a partner to support their activities.
- [At-Will Employee](https://velawood.com/glossary-term/at-will-employee/) - An At-Will Employee is an employee who does not have an employment agreement and can be terminated by the company for any reason.
- [Best Alternative to Negotiated Agreement (BATNA)](https://velawood.com/glossary-term/best-alternative-to-negotiated-agreement-batna/) - A Best Alternative to Negotiated Agreement (BATNA) is a backup plan if no agreement is reached between two parties.
- [Beta Testing](https://velawood.com/glossary-term/beta-testing/) - Beta Testing refers to testing performed by the intended customer, with the goal of getting user feedback on the product.
- [Bleeding Edge](https://velawood.com/glossary-term/bleeding-edge/) - Bleeding Edge is a term used to refer to a product, service, or technology that is so new and innovative that it is too cutting edge for the term "cutting edge."
- [Cockroach](https://velawood.com/glossary-term/cockroach/) - A Cockroach is a startup that builds slowly and spends carefully, minimizing risk so that it can survive doomsday scenarios and live to fight another day. A Cockroach isn't as attractive as a Unicorn, but it is more likely to survive lean times, and it sees lack of resources as a challenge to find creative
- [Commitment Period](https://velawood.com/glossary-term/commitment-period/) - A Commitment Period is the length of time a VC fund has to find and invest in new companies, usually five years.
- [Control](https://velawood.com/glossary-term/control/) - Control terms are terms that allow a VC to exert positive or veto control in a deal.
- [Cross-Fund Investment](https://velawood.com/glossary-term/cross-fund-investment/) - A Cross-Fund Investment is when a venture capital firm operates more than one fund and more than one fund invests in the same company.
- [Daily Active Users (DAUs)](https://velawood.com/glossary-term/daily-active-users/) - Daily Active Users (DAUs) are distinct users who engage with a platform in a given day. DAUs are an important gauge of success for any online business. Businesses often measure Weekly Active Users (WAUs) and Monthly Active Users (MAUs) as well.
- [Disruptive Technology](https://velawood.com/glossary-term/disruptive-technology/) - Disruptive Technology is a business that completely changes the way an industry operates, such as Uber and Lyft for taxis and Amazon for retail.
- [Escrow Cap](https://velawood.com/glossary-term/escrow-cap/) - An Escrow Cap is the amount of money in a merger that is set aside to remedy breaches of the merger agreement.
- [Executive Managing Director (VC Firm)](https://velawood.com/glossary-term/executive-managing-director/) - An Executive Managing Director is a senior partner in a venture capital firm who is superior to a managing director or general partner.
- [Executive Summary](https://velawood.com/glossary-term/executive-summary/) - An Executive Summary is a short summary document, normally one to three pages, that describes material facts and strategies of a company.
- [Frothy](https://velawood.com/glossary-term/frothy/) - Frothy is used to describe a market that has become overvalued thanks to skyrocketing demand. A Frothy market is characterized by rampant investor speculation on future values.
- [Full-Stack Venture Capital Firms](https://velawood.com/glossary-term/full-stack-venture-capital-firms/) - Full-Stack Venture Capital Firms are venture capital firms that employ many people beyond deal professionals, such as marketing, operations, PR, engineering, and financial executives, to attempt to help companies more than traditional VC firms.
- [General Partner (VC Firm)](https://velawood.com/glossary-term/general-partner-vc-firm/) - A General Partner is a senior partner in a venture capital firm.
- [GP Commitment (VC Fund)](https://velawood.com/glossary-term/gp-commitment-vc-fund/) - A GP Commitment is the amount of money, usually between 1% and 5% of the fund, that the general partners invest in their own fund.
- [Hard Launch](https://velawood.com/glossary-term/hard-launch/) - A Hard Launch is when a business debuts its product with a lot of fanfare and publicity, sometimes at a big event or conference. Also known as a Big Bang Launch.
- [Home Run](https://velawood.com/glossary-term/home-run/) - A Home Run is when a business has an exit that returns 20 or more times what its investors initially put in.
- [Iterating](https://velawood.com/glossary-term/iterating/) - Iterating is when a startup makes a minor change to its current business model in an attempt to capitalize on a similar or related market opportunity.
- [KISS Agreement](https://velawood.com/glossary-term/kiss/) - KISS is the acronym for "Keep It Simple Security," which can be an alternative for either a debt or equity financing.
- [Launch](https://velawood.com/glossary-term/launch/) - A Launch is when a business kicks off, often by taking its app, technology, or site live. A Launch is a great time for a startup to draw attention to its product, attract talent to its team, and introduce itself to customers. Although the typical launch involves a one-time major event, there are many different
- [Lean Startup](https://velawood.com/glossary-term/lean-startup/) - A Lean Startup seeks to prove its business concept as quickly and inexpensively as possible by making a Minimum Viable Product (MVP) the top priority. Popularized by Eric Ries.
- [Managing Director (VC Firm)](https://velawood.com/glossary-term/managing-director-vc-firm/) - A Managing Director is a senior partner at a VC firm.
- [Narwhal](https://velawood.com/glossary-term/narwhal/) - A Narwhal is a Unicorn based in Canada.
- [Operating Partner (VC Firm)](https://velawood.com/glossary-term/operating-partner-vc-firm/) - An Operating Partner is a position at a VC firm that is normally under managing director, but above principal.
- [Party Round](https://velawood.com/glossary-term/party-round/) - A Party Round is a financing round with many participants, usually at small dollar amounts.
- [Pivot](https://velawood.com/glossary-term/pivot/) - A Pivot is a wholesale change of a startup's current business model in an attempt to capitalize on a totally different market opportunity.
- [Principal (VC Firm)](https://velawood.com/glossary-term/principal-vc-firm/) - A Principal is a junior deal partner at a venture capital firm.
- [Ramen-Profitability](https://velawood.com/glossary-term/ramen-profitability/) - A startup reaches Ramen-Profitability when it is making enough money to cover costs and living expenses for its staff.
- [Rolling Launch](https://velawood.com/glossary-term/rolling-launch/) - A Rolling Launch is a launch in which a startup follows a carefully laid plan of outreach activities during the weeks before and after the actual event. A Rolling Launch may include making the product available to industry influencers in advance, building anticipation for the product on social media, providing free trials or demos, and
- [Schmuck Insurance](https://velawood.com/glossary-term/schmuck-insurance/) - Schmuck Insurance are preferences, including ones that gurantee a return for an investor, especially in a situation where an investor has concerns about overpaying at a particular point in time.
- [Simple Majority](https://velawood.com/glossary-term/simple-majority/) - A Simple Majority means more than 50% of shares or members who can vote to make a decision.
- [Soft Launch](https://velawood.com/glossary-term/soft-launch/) - A Soft Launch is a launch that, rather than focusing on a flashy one-time event, unfolds gradually. A Soft Launch may have multiple phases in order to build buzz or beat the competition to market.
- [Structure](https://velawood.com/glossary-term/structure/) - Structure refers to multiple liquidation preference or participation in a preferred stock. This is often found in late-stage deals.
- [Sunsetting](https://velawood.com/glossary-term/sunsetting/) - Sunsetting is the process of discontinuing a product, service, or business.
- [Super Angel](https://velawood.com/glossary-term/super-angel/) - A Super Angel is a very active and experienced angel investor.
- [Super Pro-Rata Rights](https://velawood.com/glossary-term/super-pro-rata-rights/) - Super Pro-Rata Rights refers to the right of shareholders to purchase shares in a future financing equal to some multiple of the percentage they currently hold at the time of such financings.
- [Trough of Sorrow](https://velawood.com/glossary-term/trough-of-sorrow/) - The Trough of Sorrow is a period in the life of a startup in which the excitement of founding a startup has worn off, but before the business really hits its stride. Many startup founders experience this struggle, especially coming out of an exciting accelerator.
- [Un-Launch](https://velawood.com/glossary-term/un-launch/) - An Un-Launch is when a startup releases its product without fanfare, relying entirely on public reaction. This strategy works well for products that are so popular that they don't need the hype of a hard launch, although an Un-Launch often means sacrificing press attention.
- [Light Preferred](https://velawood.com/glossary-term/light-preferred/) - Light Preferred is a round of funding that is smaller than a Series A round and gives investors preferred stock that receives less favorable treatment than preferred stock typically receives in Series A rounds.
- [Charter](https://velawood.com/glossary-term/charter/) - Charter is a blanket term that describes a corporation's primary governing document. In Delaware this document is the "Certificate of Incorporation," in Texas it's the "Certificate of Formation," and in California it's known as the "Articles of Incorporation."
- [Harvest Period](https://velawood.com/glossary-term/harvest-period/) - Harvest Period is the time period in a venture fund's life where the fund is focusing on "harvesting" its portfolio companies, or helping them grow. It usually comes after the fund is done making investments.
- [Catch-Up](https://velawood.com/glossary-term/catch-up/) - A Catch-Up is the distribution of funds to the managers of an investment entity to "catch-up" on an agreed upon return structure with the fund's investors. A typical catch-up may be 20% after the investors have been returned 100% of their investment plus some preferred interest. For example, an investor invests $100 with a 10%
- [Limited Partners (VC Firm)](https://velawood.com/glossary-term/limited-partners-vc-firm/) - Limited Partners are the investors in a VC fund.
- [Nano VC](https://velawood.com/glossary-term/nano-vc/) - A Nano VC is a venture fund with less than $100M in funds.
- [Runaway Valuation](https://velawood.com/glossary-term/runaway-valuation/) - A Runaway Valuation is a valuation that soars due to illogical reasons (i.e. unjustified investor demand for a hot startup). Runaway valuations can be harmful to the next funding round, or set a future valuation target that is untenable.
- [Form D](https://velawood.com/glossary-term/form-d/) - Form D is an SEC filing form used to file a notice of an exempt offering with the SEC. The exemption is found under Regulation D of the SEC. Form Ds are serious stuff; make sure you're discussing with your attorney.
- [Memorandum of Understanding (MOU)](https://velawood.com/glossary-term/memorandum-of-understanding-mou/) - See Letter of Intent (LOI) and Indication of Interest (IOI).
- [Zombiecorn](https://velawood.com/glossary-term/zombiecorn/) - Coined by Anthony Mirhaydari of PitchBook, a Zombiecorn is a Unicorn that becomes way overvalued, delaying the company’s exit and lengthening the time before investors can sell their shares for a profit.
- [Business-to-Business (B2B)](https://velawood.com/glossary-term/business-to-business-b2b/) - B2B is an abbreviation of "Business-to-Business." B2B describes a sales strategy with businesses as the primary customer.
- [Business-to-Consumer (B2C)](https://velawood.com/glossary-term/business-to-consumer-b2c/) - B2C is an abbreviation of "Business-to-Consumer." B2C describes a sales strategy with consumers as the primary customer.
- [Cryptocurrency](https://velawood.com/glossary-term/cryptocurrency/) - A digital currency built on the blockchain framework that provides a decentralized and transparent ledger of all transactions of the currency. Bitcoin and Ether are examples of cryptocurrencies.
- [Distributed Technology](https://velawood.com/glossary-term/distributed-technology/) - Distributed Technology is a decentralized technology system where the computing and pertinent data is spread across multiple locations and connected by a network. Because of the decentralization, the system does not have a single point of failure and tasks can be completed faster.
- [Initial Coin Offering (ICO)](https://velawood.com/glossary-term/initial-coin-offering-ico/) - An Initial Coin Offering (ICO) is the IPO of the crypotcurreny world. An ICO is a fundraising technique where a company makes a portion of their cryptocurrency available for purchase by the public.
- [Moat](https://velawood.com/glossary-term/moat/) - Moats are the advantages a company has over its competitors. Moat is often used to refer to the head start and infrastructure that larger, more established companies have over startups.
- [Profit and Loss (P&L or PnL)](https://velawood.com/glossary-term/profit-and-loss-pl-or-pnl/) - P&L stands for profit and loss. P&L is commonly used to refer to the P&L statement or income statement which outlines a company's income and expenses for a given year.
- [Rolling Close](https://velawood.com/glossary-term/rolling-close/) - A Rolling Close is a fundraising structure that is not limited by a predetermined value and allows a company to receive investments on an ongoing basis. After an initial investment closing, additional investors are allowed to invest in the same round with the same terms (generally within a 30 to 180 day window).
- [Total Addressable Market (TAM)](https://velawood.com/glossary-term/total-addressable-market-tam/) - The Total Addressable Market measures the total amount of people or money spent in the market that encompasses a product.
- [Utility Tokens](https://velawood.com/glossary-term/utility-tokens/) - Utility Tokens are blockchain based units that grant holders access to goods or services. Utility tokens are likely exempt from securities laws if they function more like a coupon for a product instead of an equity interest in a company.
- [Unanimous Written Consent (UWC)](https://velawood.com/glossary-term/unanimous-written-consent-uwc/) - Short for Action by Unanimous Written Consent, a UWC is a legal document that memorializes the unanimous consent of the board of directors and/or members of a corporate entity on a specific issue or action.
- [Unvested](https://velawood.com/glossary-term/unvested/) - Unvested is a term used to describe the status of securities that remain subject to forfeiture or mandatory buyback provisions, even after being set aside for, or granted to, an individual. Unvested securities typically transform into vested securities, which are not subject to forfeiture or buyback, over time or upon the meeting of certain benchmarks
- [CIIAA](https://velawood.com/glossary-term/ciiaa/) - A Confidential Information and Inventions Assignment Agreement (CIIAA) is a legal document used to assign all intellectual property (IP) and other proprietary rights created by an employee during the course of their employment to the employer. CIIAAs typically also contain non-disclosure, non-solicitation, and non-competition clauses. CIIAAs are also sometimes known as Proprietary Information and Inventions Assignment
- [Sophisticated Investor](https://velawood.com/glossary-term/sophisticated-investor/) - Sophisticated Investors are, in essence, investors who are capable of fending for themselves in a prospective transaction. The term is most often used in the context of discussions about whether a private securities offering qualifies for an exemption from registration under federal and state securities law. In order to qualify for the Rule 506(b) exemption,
- [Warm Introduction](https://velawood.com/glossary-term/warm-introduction/) - A Warm Introduction is an introduction made by an existing acquaintance to someone with whom you would like to become aquatinted, that is coupled with some sort of personal endorsement. In the venture capital world, a warm introduction is the gold standard.
- [Cold Introduction](https://velawood.com/glossary-term/cold-introduction/) - A Cold Introduction is a self-made introduction. While less optimal than a warm introduction, anyone seeking to raise venture capital will have to master the art of the cold introduction.
- [Product/Market Fit](https://velawood.com/glossary-term/product-market-fit/) - Product/Market Fit is a term used to describe when a product meets an existing need within a market. In the context of startups, a Product/Market Fit is often discussed as a necessary precondition to growth.
- [Priced Round](https://velawood.com/glossary-term/priced-round/) - A Priced Round (or Equity Round) is any round of financing in which investors receive a set amount of equity for an agreed upon price. Contrast with Convertible Debt Round.
- [Consumer-to-Business (C2B)](https://velawood.com/glossary-term/consumer-to-business-c2b/) - Consumer-to-Business (C2B) is a business model where consumer input dictates the terms of the deal they receive from a business. This can come in the form of consumers giving feedback on a product or bidding for their desired price.

## Podcasts

- [Sauce Secrets Ep. 3: Grupo Solave](https://velawood.com/vw_podcast/sauce-secrets-ep-3-grupo-solave/) - In this episode, we interview the founder and CEO of Grupo Solave, Fernando Pérez Ontiveros. Grupo Solave is based out of Guadalajara, Mexico, and is the leading producer of Agave Syrup and Tequila.
- [Vig & Juice Ep.1: Three Elements of Gambling](https://velawood.com/vw_podcast/vig-juice-ep-1/) - In this episode, we explain the meaning of Vig & Juice, discuss gambling's roots in Greek mythology, and lay out the three elements that define gambling.
- [Vig & Juice Ep.2: First U.S. Sports Betting](https://velawood.com/vw_podcast/vig-juice-ep-2-first-u-s-sports-betting/) - In this episode, we discuss the first sports betting in the U.S. up to the Wire Act of 1961, including horse racing, the spectator sport known as pedestrianism, and using state lotteries to fund the Revolutionary War.
- [Vig & Juice Ep.3: The Wire Act](https://velawood.com/vw_podcast/vig-juice-ep-3-the-wire-act/) - In this episode, we cover arguably the most monumental piece of legislation regarding sports betting - the Wire Act of 1961 - which prohibited using wire communication for betting and wagering across state lines. We discuss what the Wire Act means for online gambling and whether the act applies only to sports betting or to gambling in general.
- [Vig & Juice Ep.4: The Travel Act](https://velawood.com/vw_podcast/vig-juice-ep-4-the-travel-act/) - In this episode, we discuss the Travel Act of 1961, including Robert Kennedy taking down the mob, gambling's association with other nefarious activities, and the role of federalizing state laws.
- [Vig & Juice Ep.5: PASPA](https://velawood.com/vw_podcast/vig-juice-ep-5-paspa/) - In this episode, we discuss PASPA, the Professional and Amateur Sports Protection Act of 1992, including its carveouts and nationalization issues as well sports leagues' role as enforcers of PASPA.
- [Vig & Juice Ep.6: HB 2070 & HB 1121](https://velawood.com/vw_podcast/vig-juice-ep-6-hb-2070-hb-1121/) - In this episode, we discuss the two sports betting bills proposed in this year's legislative session, HB 2070 and HB 1121, which sought to legalize sports betting in Texas, and we share our predictions for when sports betting could realistically be legalized in Texas.
- [Vig & Juice Ep.7: The General Landscape](https://velawood.com/vw_podcast/vig-juice-ep-7-the-general-landscape/) - In this episode, we discuss shifts in the Daily Fantasy Sports (DFS) landscape, including DFS leaders moving into sports betting, how regulators are approaching non-traditional fantasy games, and our predictions for the political battles that lie ahead.
- [Vig & Juice Ep.8: Regulation Updates in Texas and Nationwide](https://velawood.com/vw_podcast/vig-juice-ep-8-regulation-updates-in-texas-and-nationwide/) - In this episode, we go over our recent Quarterly Texas Gaming Update Newsletter and discuss fantasy sports and sports wagering regulation updates in Texas and nationwide.
- [Vig & Juice: March Madness Special](https://velawood.com/vw_podcast/vig-juice-march-madness-special/) - In this special episode, VW attorneys Blake Hart, Kevin Vela, and Rad Wood unpack the rules and exemptions that govern the popular tradition of March Madness bracket pools.
- [Vig & Juice - Against the Rules S4, Eps. 1-2: Protecting the Integrity of Sports](https://velawood.com/vw_podcast/vig-juice-against-the-rules-s4-eps-1-2-protecting-the-integrity-of-sports/) - In this episode of Vig & Juice, we begin with an overview of the current sports betting landscape and then introduce a new miniseries we're launching to discuss season 4 of Against the Rules with Michael Lewis, which covers sports betting. In this episode we discuss legal topics related to episodes 1 and 2 of Against the Rules, including the Professional and Amateur Sports Protection Act of 1992 (“PASPA”), which was passed with the intention of protecting the purity of sports.
- [Vig & Juice - Against the Rules S5, Ep 3: Legislation & Regulation Within Fantasy Sports](https://velawood.com/vw_podcast/vig-juice-against-the-rules-s5-ep-3-legislation-regulation-within-fantasy-sports/) - In this episode of Vig & Juice, we break down season 5, episode 3 of Against the Rules with Michael Lewis, which explores how fantasy sports moved from a legal gray area to a state-sanctioned industry. We examine the pivotal role of attorney Jeremy Kudon in crafting legislation that legitimized fantasy sports, the strategic targeting of states like Kansas, and what this means for the next wave of fantasy sports operators navigating today’s increasingly complex legal landscape.
- [Sauce Secrets Ep. 2: Balcones Distilling](https://velawood.com/vw_podcast/sauce-secrets-ep-2-balcones-distilling/) - In this episode, we interview Jared Himstedt, the Head Distiller at Balcones Distilling. Founded in Waco, TX in 2008, this Texan distillery offers a diverse portfolio of award-winning premium spirits and American Single Malt whiskies.
- [Sauce Secrets Ep. 1: Garrison Brothers](https://velawood.com/vw_podcast/sauce-secrets-ep-1-garrison-brothers/) - For our inaugural episode, we interview Texas Whiskey Legends, Dan and Nancy Garrison of Garrison Brothers. Garrison Brothers is based out of Hye, Texas and was the first legal Texas Whiskey Distillery.
- [Preparing for Funding Ep5: Initial Sophisticated Investors - Recut](https://velawood.com/vw_podcast/preparing-for-funding-ep5-initial-sophisticated-investors-recut/) - In this episode, we discuss the difference between accredited, unaccredited, and sophisticated investors, and where to find them.
- [Preparing for Funding Ep7: Seed Round](https://velawood.com/vw_podcast/preparing-for-funding-ep7-seed-round/) - In this episode, we discuss what constitutes a seed round in Dallas and contrast the three potential structures of a seed round - equity, convertible note, and a SAFE.
- [Preparing for Funding Overview](https://velawood.com/vw_podcast/preparing-for-funding-overview/) - Preparing For Funding is a series of Office Hours episodes about getting your company’s legal house in order before taking on funding.
- [Preparing for Funding Ep7: Seed Round - Recut](https://velawood.com/vw_podcast/preparing-for-funding-ep7-seed-round-recut/) - In the final episode of this series, we discuss seed rounds, including the difference between convertible notes, SAFEs, and equity rounds, and how seed rounds have changed over the last 5 years.
- [Office Hours with Anthony Cimino](https://velawood.com/vw_podcast/office-hours-with-anthony-cimino/) - This episode of Office Hours features Anthony Cimino, Head of Policy & Regulatory Affairs at Carta, an online equity management platform. We discuss the status of several key public policy issues - including the Qualified Small Business Stock (QSBS) tax exclusion, the shifting definition of Accredited Investor, the Corporate Transparency Act, and electronic signatures and filings for 83(b) elections - and how the changes impact investor access, capital formation, and the ability of startups to raise capital.
- [Preparing for Funding Ep1: Incorporation - Recut](https://velawood.com/vw_podcast/preparing-for-funding-ep1-incorporation-recut/) - In this episode, we discuss the basics of incorporation, including the difference between corporations v. LLCs, which state to organize in, and when we recommend online document formation tools.
- [Preparing for Funding Ep2: Founders' Agreements - Recut](https://velawood.com/vw_podcast/preparing-for-funding-ep2-founders-agreements-recut/) - In this episode, we discuss founders' agreements, including Restricted Stock Purchase Agreements (RSPAs), Confidential Information and Inventions Assignment Agreements (CIIAAs), and Non-Compete and Non-Solicitation Agreements.
- [Preparing for Funding Ep3: Friends and Family Funding - Recut](https://velawood.com/vw_podcast/preparing-for-funding-ep3-friends-and-family-funding-recut/) - In this episode, we discuss how to structure a Friends & Family Round to avoid risks that affect later-stage financing rounds.
- [Preparing for Funding Ep4: Pitch Decks - Recut](https://velawood.com/vw_podcast/preparing-for-funding-ep4-pitch-decks-recut/) - In this episode, we discuss pitch decks, including what their purpose is (and isn't), how to structure an effective deck, and how to get them in front of potential investors.
- [Preparing for Funding Ep6: Accelerators/Incubators - Recut](https://velawood.com/vw_podcast/preparing-for-funding-ep6-accelerators-incubators-recut/) - In this episode, we break down the differences between accelerators and incubators, and how to find the best fit for your company.
- [Preparing for Funding Ep6: Accelerators / Incubators](https://velawood.com/vw_podcast/preparing-for-funding-ep6-accelerators-incubators/) - In this episode, we discuss why we're not big fans of accelerators, the types of accelerators we do think provide value and are worth participating in, and the clauses to watch out for in an accelerator's program participation agreement.
- [Three Things with Denisse Vigueras](https://velawood.com/vw_podcast/three-things-with-denisse-vigueras/) - In this episode, we talk with Denisse Vigueras, the founder and CEO of Fashion Law Mx, a boutique law firm that specializes in the Fashion, Art, and Technology industries. Denisse joins us from Mexico City as a part of the Young Leaders of the Americas Initiative (YLAI) Fellow Program. VW has been fortunate to participate in the YLAI program for the last few years, and Denisse is our fourth fellow. You can connect with Denisse here.
- [Preparing for Funding Ep5: Initial Sophisticated Investors](https://velawood.com/vw_podcast/preparing-for-funding-ep5-initial-sophisticated-investors/) - In this episode, we discuss qualifications for accredited investors, how to find angel investors, how angel syndicates work, which metrics you need to know for a pitch meeting, and how to respond to getting a "no."
- [Preparing for Funding Ep4: Pitch Decks](https://velawood.com/vw_podcast/preparing-for-funding-ep4-pitch-decks/) - In this episode, we discuss what makes a great pitch deck, the best uses of an appendix, how to get warm introductions to investors, and restrictions on general solicitations.
- [Preparing for Funding Ep3: Friends & Family Funding](https://velawood.com/vw_podcast/preparing-for-funding-ep3-friends-family-funding/) - In this episode, we discuss how to mitigate the risks of Friends & Family funding, which include disproportionate valuations, violating SEC and state securities laws, and messy cap tables.
- [Preparing for Funding Ep2: Founders Agreements](https://velawood.com/vw_podcast/preparing-for-funding-ep2-founders-agreements/) - In this episode, we discuss the difference between vesting and reverse vesting, confidentiality agreements and assignment of intellectual property, restricted stock and 83(b) elections, ROFR, and Class F founders stock.
- [Preparing for Funding Ep1: Incorporation](https://velawood.com/vw_podcast/preparing-for-funding-ep1-incorporation/) - In this episode, we discuss why your company's legal matters, lifestyle businesses v. venture-backed businesses, whether you should form your entity as a corporation or LLC, implications of the new tax code, and the filing requirements for entity formation.
- [Laws of the Game E4: International Eligibility](https://velawood.com/vw_podcast/laws-of-the-game-e4-international-eligibility/) - In this episode, we discuss FIFA regulations on international eligibility, including how FIFA determines which country a player is able to represent in international competitions like the World Cup, how players can effectively switch their nationality, and what it means to be "cap-tied" to a specific national team.
- [Laws of the Game E3: Road to the World Cup](https://velawood.com/vw_podcast/laws-of-the-game-e3-road-to-the-world-cup/) - In this episode, we discuss the history, hosting, and execution of the World Cup.
- [Laws of the Game E1: How the Soccer World Works Part 1](https://velawood.com/vw_podcast/laws-of-the-game-e1-how-the-soccer-world-works-part-1/) - In this episode, we discuss the organization of soccer on an international level and how the pyramid system works.
- [Laws of the Game E2: How the Soccer World Works Part 2](https://velawood.com/vw_podcast/laws-of-the-game-e2-how-the-soccer-world-works-part-2/) - In Part 2 of How the Soccer World Works, we discuss club soccer and the similarities and differences between the US and European systems.
- [Silicon Valley Review S5, Ep1: Acquihires, Leadership & Terminating Employees](https://velawood.com/vw_podcast/silicon-valley-review-s5-ep1-acquihires-leadership-terminating-employees/) - In this episode, we review S5, Ep1: "Grow Fast or Die Slowly" and discuss the point of acquihires, efficient use of office space, the difference between leadership and decision making, and terminating employees without cause.
- [Silicon Valley Review S5, Ep2: Tesla, Dead Pigs & Ira Glass](https://velawood.com/vw_podcast/silicon-valley-review-s5-ep2-tesla-dead-pigs-ira-glass/) - In this episode, we review S5, Ep2: "Reorientation" and discuss where the Silicon Valley writers get their inspiration, the importance of growing as a leader, and how long founders usually remain the CEO.
- [Silicon Valley Review S5, Ep3: Levels of Decision-Making & Employee Retention](https://velawood.com/vw_podcast/silicon-valley-review-s5-ep3-levels-of-decision-making-employee-retention/) - In this episode, we review S5, Ep3: "Chief Operating Officer" and discuss who makes day-to-day decisions v. strategic decisions v. fundamental decisions, enforcing non-competes, the three things to include in contractual agreements with your employees, and how to attract and retain great employees.
- [Silicon Valley Review S5, Ep4: Reddit, Dwight's Brother & Sticky Bear](https://velawood.com/vw_podcast/silicon-valley-review-s5-ep4-reddit-dwights-brother-sticky-bear/) - In this episode, we review S5, Ep4: "Tech Evangelist" and discuss giving clear instructions, a benefit of being a small company, and transferring assets in a partnership.
- [Silicon Valley Review S5, Ep5: AI Romances, Glass Walls & #MeToo](https://velawood.com/vw_podcast/silicon-valley-review-s5-ep5-ai-romances-glass-walls-metoo/) - In this episode, we review S5, Ep5: "Facial Recognition" and discuss how much funds typically invest in each company, what constitutes a competitor, and how the show chose to address the #MeToo movement.
- [Silicon Valley Review S5, Ep6: Cease & Desist Letters, Utility Tokens & Series B Term Sheets](https://velawood.com/vw_podcast/silicon-valley-review-s5-ep6-cease-desist-letters-utility-tokens-series-b-term-sheets/) - In this episode, we review S5, Ep6: "Artificial Emotional Intelligence" and discuss cease and desist letters, transferring utility tokens, Series B term sheets, and China's work culture.
- [Silicon Valley Review S5, Ep7: VCs vs. ICOs & Enforcing Contracts](https://velawood.com/vw_podcast/silicon-valley-review-s5-ep7-vcs-vs-icos-enforcing-contracts/) - In this episode, we review S5, Ep7: "Initial Coin Offering" and discuss ICOs, valuation milestones, harvesting user data, giving up board control, and enforcing contracts.
- [Silicon Valley Review S5, Ep8: Hockey Stick Growth, Board Control & Fiduciary Growth](https://velawood.com/vw_podcast/silicon-valley-review-s5-ep8-hockey-stick-growth-board-control-fiduciary-growth/) - In this episode, we review S5, Ep8: "Fifty-One Percent" and discuss hockey stick growth, giving up board control, and fiduciary duty.
- [Silicon Valley Review S6, Ep1: Data Privacy](https://velawood.com/vw_podcast/silicon-valley-review-s6-ep1-data-privacy/) - In this episode, we review S6, Ep1: "Artificial Lack of Intelligence" and discuss data privacy.
- [Silicon Valley Review S6, Ep2: Maximo's Valuation & Investment Offer](https://velawood.com/vw_podcast/silicon-valley-review-s6-ep2-maximos-valuation-investment-offer/) - In this episode, we review S6, Ep2: "Blood Money" and discuss earnouts, the Committee on Foreign Investment in the United States (CFIUS), California's female director requirement, and Maximo's valuation and investment offer.
- [Silicon Valley Review S6, Ep3: Board v. Shareholder Consent](https://velawood.com/vw_podcast/silicon-valley-review-s6-ep3-board-v-shareholder-consent/) - In this episode, we review S6, Ep3: "Hooli Smokes" and discuss fiduciary duties of board members, notification requirements for emergency board meetings, and the difference between board and shareholder consent.
- [Silicon Valley Review S6, Ep4: Cold Ice Cream & Hot Kisses](https://velawood.com/vw_podcast/silicon-valley-review-s6-ep4-cold-ice-cream-hot-kisses/) - In this episode, we review S6, Ep4: "Maximizing Alphaness" and discuss Richard's relationship with Ethan, Jared meeting his birth parents, and Gavin's book reading.
- [Silicon Valley Review S6, Ep5: Hooli Chocolate & Pied Piper Peanut Butter](https://velawood.com/vw_podcast/silicon-valley-review-s6-ep5-hooli-chocolate-pied-piper-peanut-butter/) - In this episode, we review S6, Ep5: "Techics" and discuss the legalities of "unmerging" a merger, transferring ownership, and whether or not Pied Piper would be liable for Gavin's unethical actions as CEO of Hooli.
- [Three Things with Travis Holt: Insurance For Startups](https://velawood.com/vw_podcast/three-things-with-travis-holt-insurance-for-startups/) - In this episode, we talk with Travis Holt, the co-founder of Brush Creek Partners, a commercial insurance and risk management firm in Kansas City, about insurance needs for early-stage companies. We discuss the three core policies SaaS companies need, the current D&O insurance market, and key exclusions to look for in a policy.
- [Insider's Guide to Finance](https://velawood.com/vw_podcast/insiders-guide-to-finance/) - Kevin was interviewed by The Insider's Guide to Finance podcast about properly navigating your company through the stages of financing. Check it out!
- [Silicon Valley Review: Series Finale](https://velawood.com/vw_podcast/silicon-valley-review-series-finale/) - In this episode, we review both Ep5 and Ep6 of Season 6, the final episodes of the season and of the series. We discuss terms of service, decentralized internet, Pied Piper's original story, and (spoiler alert) our thoughts on the founders' final decision to sabotage their software.
- [Silicon Valley Review S4, Ep3: Types of Investors, Seed Funding & Collaborative VCs](https://velawood.com/vw_podcast/silicon-valley-review-s4-ep31-types-of-investors-seed-funding-collaborative-vcs/) - In this episode, we review S4, Ep3: "Intellectual Property" and discusses the types of investors you will encounter in each stage of raising capital, how realistic a VC's $200,000 seed investment really is, and the collaborative nature of VCs in Dallas.
- [Silicon Valley Review S4, Ep1: Recapitalization, Founder's Syndrome & The Unruly Board Member](https://velawood.com/vw_podcast/silicon-valley-review-s4-ep1-recapitalization-founders-syndrome-the-unruly-board-member/) - In this episode, we review S4, Ep1: "Success Failure" and discuss when you can change company ownership, the importance of product v. growth, board composition, and more.
- [Silicon Valley Review S4, Ep2: Cocky CEOs, Ex Co-Founders & Terms of Service](https://velawood.com/vw_podcast/silicon-valley-review-s4-ep30-cocky-ceos-ex-co-founders-terms-of-service/) - In this episode, we review S4, Ep2: "Terms of Service" and discuss how CEOs should handle the spotlight, navigating relationships with ex co-founders, and terms of service and policy agreements.
- [Silicon Valley Review S4, Ep4: Assigning IP, Vesting Schedules & Spending Investor Money](https://velawood.com/vw_podcast/silicon-valley-review-s4-ep32-assigning-ip-vesting-schedules-spending-investor-money/) - In this episode, Kevin and Aaron review S4, Ep4: "Team Building Exercise" and discuss assigning intellectual property to the company, contribution agreements v. license agreements, getting sued, typical vesting schedules, and spending controls for investors' money.
- [Silicon Valley Review S4, Ep5: Rollouts, Cash Burn & NDAs](https://velawood.com/vw_podcast/silicon-valley-review-s4-ep33-rollouts-cash-burn-ndas/) - In this episode, Kevin and Aaron review S4, Ep5: "The Blood Boy" and discuss typical rollouts in Dallas v. Silicon Valley, the importance of low cash burn, how NDAs shouldn't be the only consideration, and transferring patents.
- [Silicon Valley Review S4, Ep6: Beta Testing Best Practices & Incubators v. Accelerators](https://velawood.com/vw_podcast/silicon-valley-review-s4-ep34-beta-testing-best-practices-incubators-v-accelerators/) - In this episode, we review S4, Ep6: "Customer Service" and discuss beta testing best practices and the differences between incubators and accelerators.
- [Silicon Valley Review S4, Ep7: Did Bream Hall & Erlich Violate SEC Securities Regulation Laws?](https://velawood.com/vw_podcast/silicon-valley-review-s4-ep35-did-bream-hall-erlich-violate-sec-securities-regulation-laws/) - In this episode, we review S4, Ep7: "The Patent Troll" and discuss the legality of Bream Hall paying Erlich a finder’s fee, the differences between finders and broker-dealers, the pros and cons of hiring an attorney to negotiate a demand letter, and the three acts that govern investment activity.
- [Silicon Valley Review S4, Ep8: Key Man Insurance v. Key Holder Clauses](https://velawood.com/vw_podcast/silicon-valley-review-s4-ep36-podcast/) - In this episode, we review S4, Ep8: "The Keenan Vortex" and discuss the difference between key man insurance and key holder clauses, using another company's IP, and the likelihood of a venture deal blowing up.
- [Silicon Valley Review S4, Ep9: A CEO's Self-Destruction](https://velawood.com/vw_podcast/silicon-valley-review-s4-ep37-a-ceos-self-destruction/) - In this episode, we review S4, Ep9: "Hooli-Con" and discuss Richard's negative patterns of behavior as the CEO of Pied Piper as well as the viability of Keenan Feldspar's company's acquisition price.
- [Silicon Valley Review S4, Ep10: Employee Handbooks & Terminating Employees](https://velawood.com/vw_podcast/silicon-valley-review-s4-ep38-employee-handbooks-terminating-employees/) - In this episode, we review S4, Ep10: "Server Error" and discuss legal and practical reasons for maintaining an employee handbook, distinguishing between policy and discrimination when terminating an employee, best practices for transitioning employees out, and more.
- [Silicon Valley Review Overview](https://velawood.com/vw_podcast/silicon-valley-review-overview/) - In Silicon Valley Review, we review each episode of HBO’s Silicon Valley and discuss how it applies to real startups.
- [What Should We Name Our Podcast?](https://velawood.com/vw_podcast/vela-keller-podcast-1/) - In our first episode, we introduce ourselves and seek a little outside help in coming up with a better name than "Podcast."
- [Thoughts On Domain Name Extensions](https://velawood.com/vw_podcast/vela-keller-podcast-2-thoughts-on-domain-name-extensions/) - Choosing a domain name is important. Don't choose the wrong extension.
- [Starting A New Business? Here’s What They Haven’t Told You (Part 1)](https://velawood.com/vw_podcast/starting-a-new-business-heres-what-they-havent-told-you-part-1-2/) - In this VW Podcast, we start our list of 10 things that no one told you before you started your small business.
- [Starting A New Business? Here’s What They Haven’t Told You (Part 2)](https://velawood.com/vw_podcast/starting-a-new-business-heres-what-they-havent-told-you-part-2/) - In this VW Podcast we wrap up our list of 10 things that no one told you before starting your small business.
- [Classifying Workers As Independent Contractors – Common Pitfalls](https://velawood.com/vw_podcast/vk-office-hours-classifying-your-workers/) - In this episode, we discuss some common pitfalls when classifying workers as independent contractors.
- [Avoiding The Automatic Renewal Trap](https://velawood.com/vw_podcast/vk-office-hours-the-automatic-renewal-trap/) - Some contracts "automatically renew" unless you affirmatively reject the renewal period. In this episode, we discuss this litigation trap, and how to avoid it.
- [Interview: Matt Alexander Of Need](https://velawood.com/vw_podcast/vk-office-hours-matt-alexander-of-need-interview/) - Kevin interviews our client Matt Alexander about his experience launching a curated fashion startup.
- [Interview: Dorie Pickle Of Creative Pickle](https://velawood.com/vw_podcast/vk-office-hours-dorie-pickle-interview/) - Kevin interviews Dorie Pickle, the founder and director of Creative Pickle, an Austin-based digital agency, about running her own business.
- [What Does Choice Of Law Mean?](https://velawood.com/vw_podcast/vk-office-hours-what-does-choice-of-law-mean/) - You know all of those provisions at the end of contracts and agreements under "Miscellaneous"? Do you ever wonder what they mean? In this episode, we discuss choice of law, venue, and attorneys' fees.
- [Terminating Employees – The Do's And Don'ts](https://velawood.com/vw_podcast/vk-office-hours-terminating-employees/) - In this episode Kevin and Ray discuss the do's and don'ts of terminating employees. A must listen for any small business owner or startup.
- [Interview: Daniel De Valdenebro Of LiftFund](https://velawood.com/vw_podcast/vk-office-hours-interview-with-liftfund/) - Kevin interviews Daniel De Valdenebro of LiftFund about alternative lending sources for small businesses.
- [Term Sheets 101: Convertible Debt v. Equity (Part 2)](https://velawood.com/vw_podcast/term-sheets-101-convertible-debt-vs-equity-part-2/) - If you're a startup looking to raise capital, here is some of the basic language you need to know.
- [Term Sheets 101: Convertible Debt v. Equity (Part 1)](https://velawood.com/vw_podcast/term-sheets-101-podcast/) - If you're a startup looking to raise capital, here is some of the basic language you need to know.
- [Venture Deals Review Ch. 1: The Players](https://velawood.com/vw_podcast/venture-deals-review-ch-1-vcs-non-monetary-value-friendsfamily-financing-issues-sec-advisor-success-fees-rules/) - In this episode, we discuss the non-monetary value your VC should provide, issues with Friends and Family financing, how the angel investor ecosystem has evolved, and how paying advisors success fees can violate SEC laws. Note: We recommend listening VDR Ch.16 first, before VDR Ch.1
- [VDR Ch. 2: How to Raise Money](https://velawood.com/vw_podcast/venture-deals-review-ch-2-raising-money-pitch-decks/) - In this episode, we discuss how to determine how much money to raise, how to prepare a pitch deck, whether or not you need a PPM, four key roles of a lead investor, and first practical steps after deciding to raise money.
- [VDR Ch. 3: Overview of the Term Sheets](https://velawood.com/vw_podcast/venture-deals-review-ch-3-term-sheets/) - In this episode, we discuss who is responsible for providing the term sheet, which parts of a term sheet are binding, the different types of term sheets, and what should be included in a term sheet.
- [VDR Ch. 4, Part 1: Economic Terms of the Term Sheet](https://velawood.com/vw_podcast/venture-deals-review-ch-4-part-1-liquidation-preference/) - In this episode, we discuss why the difference between pre-money valuation and post-money valuation matters when negotiating with a VC, why price per share is critical in later financing docs, what is included in a fully-diluted basis, why accepting a lower valuation can be the best option, the difference between participating preferred stock and non-participating preferred stock, and why play-to-pay scenarios are no longer common.
- [VDR Ch. 4, Part 2: Economic Terms of the Term Sheet](https://velawood.com/vw_podcast/venture-deals-review-ch-4-part-2-vesting-option-pools/) - In this episode, we discuss why venture-backed startups must vest their equity, why you shouldn't give employees Restricted Stock Purchase Agreements, how to get VCs to agree to a smaller option pool, and the difference between full ratchet anti-dilution and weighted-average anti-dilution.
- [VDR Ch. 5: Control Terms of the Term Sheet](https://velawood.com/vw_podcast/venture-deals-review-ch-5-protective-provisions/) - In this episode, we discuss which activities a company's board of directors must approve, how long a company should keep control of its board, the difference between a board member and board observer, and negotiating a threshold for protective provisions.
- [VDR Ch. 6, Part 1: Other Terms of the Term Sheet](https://velawood.com/vw_podcast/venture-deals-review-ch-6-part-1-all-the-rights/) - In this episode, we discuss the difference between compounding and non-compounding dividends, why VCs ask for redemption rights, when conditions precedent matter, what's included in information rights, and suggested thresholds for registration rights and ROFO.
- [VDR Ch. 6, Part 2: Other Terms of the Term Sheet](https://velawood.com/vw_podcast/vdr-ch-6-part-2-rofr-no-shop-do-insurance/) - In this episode, we discuss restriction on sales, assigning confidential information to the company, tag along rights, no-shop agreements, and indemnification clauses.
- [VDR Ch. 7: The Cap Table](https://velawood.com/vw_podcast/vdr-ch-7-the-cap-table/) - In this episode, we discuss best uses of cap tables, online cap table management platforms, and how VCs and companies each approach calculating price per share.
- [VDR Ch. 8: Convertible Debt](https://velawood.com/vw_podcast/vdr-ch-8-convertible-debt/) - In this episode, we discuss the pros and cons of using convertible debt from both an investor and company perspective, the three different scenarios that will cause a conversion, and when you should and shouldn't use KISS or SAFE agreements.
- [VDR Ch. 9: Crowdfunding](https://velawood.com/vw_podcast/vdr-ch-9-crowdfunding/) - In this episode, we discuss product, charity, and equity crowdfunding, company types that best fit crowdfunding, the importance of being familiar with securities regulations and exemptions, and the future of crowdfunding.
- [VDR Ch. 10: How Venture Capital Funds Work](https://velawood.com/vw_podcast/vdr-ch-10-how-venture-capital-funds-work/) - In this episode, we discuss typical management fees and carried interest structures, clawback provisions, the difference between capital calls and blind pools, and the difference between corporate VC arms and strategic investors.
- [VDR Ch. 11: Negotiation Tactics](https://velawood.com/vw_podcast/vdr-ch-11-negotiation-tactics/) - In this episode, we discuss the role of your lawyer in a term sheet negotiation, when and how to walk away from a deal, and the best ways to prepare for a negotiation.
- [VDR Ch. 12: Raising Money the Right Way](https://velawood.com/vw_podcast/vdr-ch-12-raising-money-the-right-way/) - In this episode, we discuss what your venture attorney's role is - and isn't - in raising money, expectations for your Friends and Family Round, and best practices when emailing potential investors.
- [VDR Ch. 13: Issues at Different Financing Stages](https://velawood.com/vw_podcast/vdr-ch-13-issues-at-different-financing-stages/) - In this episode, we discuss runaway valuations, party rounds, and board control.
- [VDR Ch. 14, Part 1: Letters of Intent—The Other Term Sheet](https://velawood.com/vw_podcast/vdr-ch-14-part-1-letters-of-intent-the-other-term-sheet/) - In this episode, we discuss the difference between an asset deal and stock deal, forms of consideration, earnouts, and representations & warranties.
- [VDR Ch. 14, Part 2: Letters of Intent](https://velawood.com/vw_podcast/vdr-ch-14-part-2-letters-of-intent/) - In this episode, we discuss when to ask for a breakup fee, conditions precedent, and extended no-shop periods.
- [VDR Ch. 15: Why Do Term Sheets Even Exist?](https://velawood.com/vw_podcast/vdr-ch-15-why-do-term-sheets-even-exist/) - In this episode, we discuss what the term sheet negotiation process establishes, as well as transaction costs and reputation constraints.
- [VDR Ch. 16: Legal Things Every Entrepreneur Should Know](https://velawood.com/vw_podcast/vdr-ch-16-legal-things-every-entrepreneur-should-know/) - In this episode, we discuss wage claims, entity types, accredited v. non-accredited investors, 83(b) elections, and 409A valuations.
- [Venture Deals Review Overview](https://velawood.com/vw_podcast/venture-deals-review-overview/) - Venture Deals Review is a series of Office Hours episodes discussing the book Venture Deals: Be Smarter Than Your Lawyer and Venture Capitalist by Brad Feld and Jason Mendelson.
- [Three Things with Kevin Vela & Aaron Terwey](https://velawood.com/vw_podcast/three-things-1/) - In this first episode, Kevin and Aaron share their three things with you. They discuss necessary documentation, intellectual property, domain names, work for hire, vesting ownership, cofounder breakups, working with developers, references, and more.
- [Three Things with Mark Clayton & Jason Fox](https://velawood.com/vw_podcast/three-things-with-mark-clayton-jason-fox/) - In this episode, Kevin and Aaron interview two clients who are former NFL players turned entrepreneurs - Mark Clayton, founder of LIVV Headphones, and Jason Fox, founder of EarBuds Music. They discuss life as an athlete v. life as an entrepreneur, unexpected setbacks, the key factor that leads to success, and how much you should spend on hiring web developers.
- [Three Things with Shaz Amin](https://velawood.com/vw_podcast/three-things-with-shaz-amin/) - In this episode, Kevin and Aaron interview Shaz Amin, the founder of Blue Track Media and Plugged Inc., about his three things. They discuss the mental toll it takes and the loneliness that comes with being an entrepreneur, the importance of having a technical co-founder, developing a vision beyond making money, and the value of mentorship.
- [Three Things with Michael Walsh](https://velawood.com/vw_podcast/three-things-with-michael-walsh/) - In this episode, Kevin interviews Michael Walsh, the founder of Cariloop, a caregiver support platform. They discuss the difference between raising capital from private equity vs. traditional venture avenues, the sales cycle of B2B companies, the importance of establishing a culture, and asking for help from mentors and advisors.
- [Three Things with Rustam Rafikov](https://velawood.com/vw_podcast/three-things-with-rustam-rafikov/) - In this episode, Kevin and Rad interview Rustam Rafikov, a founding partner of Rafikov, Koveshnikova and Partners, a corporate law firm for startups and medium-sized businesses based in Moscow, Russia. They discuss the lack of contractual freedom in Russia, Russia's popular startup industries, and what Rustam has learned from the Austin and Dallas startup ecosystems.
- [Silicon Valley Review S3, Ep8: ROFR v. ROFO](https://velawood.com/vw_podcast/silicon-valley-review-season-3-episode-8-can-she-do-that/) - The primary conflict in Episode 8 of this season of Silicon Valley stems from Laurie swooping in and buying out Erlich's shares at a deep discount to market (i.e. the price that Russ was willing to pay).
- [Silicon Valley Review S2, Ep1: Runaway Valuations](https://velawood.com/vw_podcast/vks-silicon-valley-review-season-2-episode-1/) - The first episode of season two of Silicon Valley cleverly hid the main theme of runaway valuations by initially focusing on the Pied Piper guys getting bigger and more outrageous term sheets from VCs the more snarky and outrageous the PP guys were in the VC meetings. The first mention of a runaway valuation came
- [Silicon Valley Review S2, Ep2-4: The Importance of a Good Board](https://velawood.com/vw_podcast/silicon-valley-season-ii-episodes-2-4-recap-the-importance-of-a-good-board/) - One of the key tenets of a board seat is the ability to "have a voice in the room." Board members also get access to information that shareholders normally don't. I like to think that you get as many smart guys in the room as you can, have good discourse on the subject, and the right decisions will emerge.
- [Silicon Valley Review S3, Ep1: Are You The Right CEO?](https://velawood.com/vw_podcast/silicon-valley-review-season-3-episode-1-are-you-the-right-ceo/) - For any attorney who works with a lot of startups, the topics and dialogue in Episode 3.1 rang loud and true. Dealing with board meetings and interpreting governing docs, vesting schedules, and employment agreements is a daily pleasure around VW. But the overall message of 3.1 is that every startup founder should be asking herself
- [Silicon Valley Review S3, Ep2: You'll Get To Revenue When?](https://velawood.com/vw_podcast/silicon-valley-review-season-3-episode-2-revenue/) - I loved Episode 2. Both as a fan of the show and an attorney. I thought the writers did a great job of injecting controversy and strife into the warm and fuzzy relationship between Richard and Jack Barker that Episode 1 ended with. The core conflict is vision vs. reality; in this case, Richard's vision for
- [Silicon Valley Review S3, Ep4: Comparing Valuations To Competitors](https://velawood.com/vw_podcast/silicon-valley-review-season-3-episode-4/) - In this week's episode, Richard and his team's dream for Pied Piper is to build out a full platform, instead of just a data storage box. Richard's conflict with Jack peaks when Hooli acquires Endframe for $250M. In the episode, this solidifies the long-term value of Pied Piper as a middle-out compression platform, and the
- [Silicon Valley Review S3, Ep7: Search For Naysayers](https://velawood.com/vw_podcast/silicon-valley-review-season-3-episode-7-search-for-naysayers/) - Episode 7 of Silicon Valley is setting up Richard and the Pied Piper team for massive customer rejection. Every beta tester not named Monica is thrilled with the product. Something has to go wrong.
- [Test](https://velawood.com/vw_podcast/test/)

## Case Studies

- [Telos Health Solution](https://velawood.com/case-study/telos-health-solution/) - Telos provides technology solutions that deliver real-time patient measure updates and intuitive care coordination workflows that enhance community care providers' ability to make timely value-based care decisions. Telos came to VW after a year of operations and VW helped Telos to restructure into a more venture friendly corporate structure, helped to facilitate millions in venture
- [Build With Robots](https://velawood.com/case-study/build-with-robots/) - Build With Robots is a New Mexico-based tech company that designs and builds robotics to perform dangerous, repetitive tasks. Build With Robots' technology is not designed to replace people's jobs - their goals are to make workers lives easier and keep people safe with innovative, high-tech tools. Vela Wood has been alongside BWR since its
- [Apptopia](https://velawood.com/case-study/apptopia/) - Boston based Apptopia is a data intelligence platform that enables brands to analyze critical competitive signals and gain insights across mobile apps and connected devices. Apptopia customers include some of the best known brands in the world, including Zoom, Target, NBC, Visa, Andreesen Horowitz, and Coca-Cola. Vela Wood was brought in to represent Apptopia for
- [SignEasy](https://velawood.com/case-study/sign-easy/) - SignEasy is a global leader in the electronic signature space and is trusted by over 35,000 companies worldwide and processes millions of signatures each year. SignEasy has been a Vela Wood client for over 10 years, and during that time Vela Wood has counseled SignEasy through capital raises, international expansion, and partnerships and integrations with
- [NoiseAware Inc.](https://velawood.com/case-study/noiseaware-inc/) - NoiseAware offers state of the art noise monitoring solutions for the short-term rental industry. NoiseAware has evolved over the past several years into a global leader in hardware and software solutions for individual and professional property managers alike. Vela Wood first met the NoiseAware team at an accelerator in Dallas and is proud to have
- [Tennessee Titans](https://velawood.com/case-study/tennessee-titans/) - Vela Wood is proud to represent the Tennessee Titans. Vela Wood has supported the Titans in-house legal team and business units with drafting and negotiating various types of commercial agreements, including sponsorship agreements, stadium-related service agreements, and facility rentals, along with providing legal and compliance counsel on promotional, ticketing, and marketing-related issues.

## Infographics

- [Venture Deals Report 2025](https://velawood.com/infographic/venture-deals-report-2025/)
- [VW FWD Impact Report 2025](https://velawood.com/infographic/vw-fwd-impact-report-2025/)
- [Year in Review 2025](https://velawood.com/infographic/year-in-review-2025/)
- [Year in Review 2024](https://velawood.com/infographic/year-in-review-2024/)
- [VW FWD Impact Report 2024](https://velawood.com/infographic/vw-fwd-impact-report-2024/)
- [Venture Deals Report 2024](https://velawood.com/infographic/venture-deals-report-2024/)
- [Venture Deals Report 2023](https://velawood.com/infographic/venture-deals-report-2023/)
- [VW FWD Impact Report 2023](https://velawood.com/infographic/vw-fwd-impact-report-2023/)
- [Vela Wood Fifteen-Year Report](https://velawood.com/infographic/fifteen-year-report/)
- [Venture Deals Report 2022](https://velawood.com/infographic/venture-deals-report-2022/)
- [Venture Deals Report 2020](https://velawood.com/infographic/venture-deals-report-2020/)
- [Year in Review 2022](https://velawood.com/infographic/year-in-review-2022/)
- [Venture Deals Report 2021](https://velawood.com/infographic/venture-deals-report-2021/)
- [VW FWD Impact Report 2022](https://velawood.com/infographic/vw-fwd-2022/)
- [Year in Review 2021](https://velawood.com/infographic/year-in-review-2021/)
- [VW FWD Impact Report 2021](https://velawood.com/infographic/vw-fwd-2021/)
- [VW FWD Impact Report 2020](https://velawood.com/infographic/vw-fwd/)
- [Year in Review 2020](https://velawood.com/infographic/year-in-review-2020/)
- [Venture Deals 2015: Seed Stage](https://velawood.com/infographic/landscape-series-seed-investing-north-texas/)
- [Venture Deals 2016](https://velawood.com/infographic/vw-venture-deals-year-in-review-2016/)
- [Venture Deals 2016-2019: 4-Year Summary & Trends](https://velawood.com/infographic/venture-deals-4-year-summary-trends/)
- [Year in Review 2012](https://velawood.com/infographic/year-in-review-2012/)
- [Year in Review 2013](https://velawood.com/infographic/year-in-review-2013/)
- [Year in Review 2014](https://velawood.com/infographic/year-in-review-2014/)
- [Year in Review 2015](https://velawood.com/infographic/year-in-review-2015/)
- [Year in Review 2016](https://velawood.com/infographic/year-in-review-2016/)
- [Year in Review 2017](https://velawood.com/infographic/year-in-review-2017/)
- [Year in Review 2018](https://velawood.com/infographic/year-in-review-2018/)
- [Year in Review 2019](https://velawood.com/infographic/year-in-review-2019/)

## Trackers

- [Sports Betting Tracker](https://velawood.com/tracker/sports-betting-tracker/)
- [Fantasy Sports Legislation, Law, and Regulation Tracker](https://velawood.com/tracker/fantasy-sports-legislation-tracker/) - The information provided below does not, and is not intended to, constitute legal advice; all information below is for general informational purposes only and may not constitute the most up-to-date data. This page contains links to third-party websites, and such links are only for the convenience of the reader. A particular game's fantasy contest eligibility
- [Sports Betting Legislation Tracker](https://velawood.com/tracker/sports-betting-legislation-tracker/)
- [Name, Image, & Likeness Rights Legislation](https://velawood.com/tracker/name-image-likeness-rights-legislation/)
- [NIL Passed Legislation](https://velawood.com/tracker/passed-legislation/)

## Staff Members

- [Tracey Hinkle](https://velawood.com/staff_member/tracey-hinkle/) - Tracey Hinkle is Chief Operating Officer at Vela Wood. Tracey leads all day-to-day operational and administrative functions across the organization. Her scope spans HR, marketing, technology, and people operations — with a constant focus on building systems that are practical, adopted, and built to last. In this role, Tracey is the connective tissue between firm
- [Jasmine Williams](https://velawood.com/staff_member/jasmine-williams/) - Jasmine Williams is the Office Concierge – Austin at Vela Wood. Her role includes managing and coordinating calendars and overseeing daily operations that support the entire firm, including office inventory, office events, legal document processing, and client communications. She also serves as the Austin Coordinator for VW FWD, the firm’s social change initiative, where she
- [Audrey Headlee](https://velawood.com/staff_member/audrey-headlee/) - Audrey Headlee is the Office Coordinator at Vela Wood. She manages front desk operations, coordinates meetings, and assists with office logistics. With a background in customer service and office administration, Audrey keeps the office running smoothly while embodying Vela Wood’s commitment to exceptional service and teamwork. Audrey graduated with an A.G.S. from Colorado State University
- [Kim Faussete](https://velawood.com/staff_member/kim-faussete/) - Kim Faussete is a Senior Paralegal at Vela Wood. Her role includes assisting attorneys and clients with corporate governance and transactional matters, conversions and mergers, debt and equity financings, and federal and state regulatory filings and notices. Kim is a Notary Public in the State of Texas and prior to working at Vela Wood, Kim
- [Shammie Abagnale](https://velawood.com/staff_member/shammie-abagnale/) - Shammie Abagnale is the Manager of IT at Vela Wood. Her role includes overseeing the procurement of software, technology, and other resources. She also manages vendor relations, accounts payable, new employee technical onboarding, and attorney licensing, among other responsibilities. She is also the Dallas Coordinator for VW FWD, the firm’s social change initiative. Shammie graduated
- [Lisa Nelson](https://velawood.com/staff_member/lisa-nelson/) - Lisa Nelson is a Senior Advisor at Vela Wood. Lisa graduated from the University of Western Australia with a B.A. in Industrial Relations and Italian and earned an M.B.A. from Southern Methodist University. Prior to joining Vela Wood, Lisa was the CHRO for Match Group and an Adjunct Professor within the Management and Organizations department
- [Joel Mathew](https://velawood.com/staff_member/joel-mathew-cpa/) - Joel Mathew is the Chief Financial Officer at Vela Wood. In his role, he leads the firm’s financial strategy, including budgeting, financial planning, and analysis, as well as managing relationships with external financial partners. He is responsible for overseeing financial reporting, ensuring compliance with regulatory standards, and optimizing the firm's capital structure. Prior to joining
- [Angela Upson](https://velawood.com/staff_member/angela-upson/) - Angela Upson serves as a Client Services Consultant at Vela Wood, supporting Managing Partner Kevin Vela in delivering a seamless client experience—from initial interaction through engagement onboarding. Angela graduated from the University of Colorado Denver with a B.A. in Communications focused in Legal Studies. Prior to joining Vela Wood, Angela worked in Member Services for
- [Katherine Faussete](https://velawood.com/staff_member/katherine-faussete/) - Katherine Faussete is the Director of Client Services at Vela Wood. In her role, she oversees all aspects of billing operations, including onboarding new clients and preparing, reviewing, and submitting client invoices. Kat graduated cum laude from Grayson College with an A.S. in Sociology. Prior to joining Vela Wood, Kat spent 20 years in banking
- [Emily Savage](https://velawood.com/staff_member/emily-savage/) - Emily Savage is a Billing Analyst at Vela Wood. Her role includes providing billing support through invoicing, payments, and client billing communications. Prior to joining Vela Wood, Emily spent over a decade in the banking industry, specializing in payment systems, legal operations, and investigations. In her spare time, she enjoys attending live music events, home
- [Lexie Bauman](https://velawood.com/staff_member/alexis-bauman/) - Lexie Bauman is a Legal Assistant at Vela Wood. With a focus on venture and employment, her role includes supporting attorneys with corporate governance, financings, and all things related to startup management and capitalization. Lexie graduated from The University of Texas at Arlington with a B.A. in Political Science and obtained a Paralegal Certificate from
- [Liz True](https://velawood.com/staff_member/liz-true/) - Liz True is the Senior Paralegal at Vela Wood. Her role includes supporting attorneys and clients with debt and equity financings, mergers & acquisitions, entity formations and conversions, corporate governance, cap table and option plan management, complex closings, and much more. Liz also provides training and guidance to the legal staff and law clerks as
- [Luke Charpentier](https://velawood.com/staff_member/luke-charpentier/) - Luke Charpentier is a Venture Legal Assistant at Vela Wood. His role includes coordinating startup formations and conversions, assisting in financing rounds, conducting client due diligence and legal research, and supporting VW Partner Kevin Vela. Luke graduated from the McCombs School of Business at the University of Texas at Austin with a Bachelor of Business
- [Lauren Figura](https://velawood.com/staff_member/lauren-figura/) - Lauren Figura is a Venture Legal Assistant at Vela Wood. Her role includes managing Secretary of State filings, supporting entity formations and dissolutions, organizing and maintaining documentation, and supporting VW Senior Attorney Mattison Raiford. Lauren graduated from Southern Methodist University in Dallas, Texas, with a B.S. in Psychology and a minor in History. Prior to
- [Ngoc Do](https://velawood.com/staff_member/ngoc-do/) - Ngoc Do is a Senior Litigation Paralegal at Vela Wood. Her role includes providing comprehensive support to the litigation team across all stages of the dispute process, including trial and hearing preparation, e-discovery coordination, legal research, and ensuring seamless case management from inception through resolution. Ngoc earned a B.A. in Economics, along with a Business
- [Rayna Costanzo](https://velawood.com/staff_member/rayna-costanzo/) - Rayna Costanzo is a Legal Assistant at Vela Wood. Her role includes supporting the litigation team in preparing for hearings, filing pleadings and other court documents, docketing deadlines, and maintaining case records. Rayna graduated from Loyola University of Chicago with a B.A. in Journalism and International Studies. Most recently, she completed a paralegal certificate program
- [Amy Nieto](https://velawood.com/staff_member/amy-nieto/) - Amy Nieto is an Executive Assistant at Vela Wood. Her role includes managing and coordinating calendars, drafting engagement letters, and supporting VW Partner Carr Staley. She is appointed as a Notary in the State of Texas. In her spare time, she enjoys art, going to concerts, doing DIY projects (she considers building Ikea furniture as
- [Madison Ewing](https://velawood.com/staff_member/madison-ewing/) - Madison Ewing is Chief of Staff at Vela Wood. Her role includes acting as a trusted advisor to the firm’s leadership team, ensuring alignment between strategic objectives and execution. She is responsible for driving key firm-wide initiatives, facilitating collaboration across all departments to ensure efficiency, and streamlining processes for enhanced operational effectiveness. Madison graduated Beta
- [Ashley Olivas](https://velawood.com/staff_member/ashley-brown/) - Ashley Olivas is an Executive Assistant at Vela Wood. Her role includes managing schedules, coordinating travel logistics, and ensuring seamless operational support for VW Partner Jenny Young. Ashley is currently studying Business Administration & Management at Austin Community College and brings over a decade of experience in optimizing administrative functions. Outside of the office, you’ll
- [Victor Vela](https://velawood.com/staff_member/victor-vela/) - Victor Vela is a Venture Analyst at Vela Wood. His role includes managing and creating pro forma cap tables for venture financing rounds, assisting in venture transactions, and supporting firm clients. Victor graduated from The Price College of Business at the University of Oklahoma with a B.B.A in Finance. Prior to joining Vela Wood, Victor
- [Mirth Hinojosa](https://velawood.com/staff_member/mirth-hinojosa/) - Mirth Hinojosa is a Paralegal at Vela Wood. Her role includes supporting attorneys with corporate transactional matters, including equity financings, mergers and acquisitions, entity formations, security filings, and conversions. She also assists with drafting and formatting transactional documents, preparing electronic closing binders, and coordinating filings with state agencies. Additionally, Mirth provides translation services and assists
- [Danielle Fields](https://velawood.com/staff_member/danielle-fields/) - Danielle Fields is the Client Account Specialist at Vela Wood. Her role involves supporting clients throughout their entire journey with the firm and supporting the finance team. From initial client outreach and potential client consultations to offboarding and retainer management, Danielle strives to provide a seamless experience for every client. She is also a Notary
- [Yenisley Arias](https://velawood.com/staff_member/yenisley-arias/) - Yeni Arias is an Executive Assistant at Vela Wood. Her role includes managing and coordinating calendars, organizing meetings, and supporting Radney Wood, Managing Partner of the VW Austin Office. Yeni graduated with an Associate Degree in Hospitality and Tourism Management from Madrid, Spain, and a B.A. in Social Sciences with a focus on Sociology from
- [Nikki Rosema](https://velawood.com/staff_member/nikki-dabney/) - Nikki Rosema is the Director of Communications at Vela Wood. She oversees the firm’s marketing efforts, brand strategy, content development, external relations, and events. Nikki graduated summa cum laude from Southern Methodist University with a Bachelor of Arts in Journalism and Religious Studies, and she's been with the firm since 2016!
- [Michael Habib](https://velawood.com/staff_member/michael-habib/) - Michael Habib is a Venture Associate at Vela Wood. His role includes assisting with the management of firm investment funds, providing operational support for VDub Lab ventures, and conducting research and analysis for VW's venture practice. Michael graduated from The Cox School of Business at Southern Methodist University in Dallas, Texas with a Bachelor of
- [Kait Palmer](https://velawood.com/staff_member/kait-palmer/) - Kait is the Event and Sponsorship Coordinator at Vela Wood. Kait coordinates all firm events, including internal team events, lunch and learns, volunteer opportunities, sponsorships, and our annual VW Abroad trip. She graduated magna cum laude from Middle Tennessee State University in Murfreesboro, Tennessee with a B.S. in Marketing and Organizational Communications as well as
- [Allie Lavoie](https://velawood.com/staff_member/allie-lavoie/) - Allie Lavoie is the Marketing Coordinator at Vela Wood. Her role includes executing firm content and communications, coordinating firm awards, and managing brand merchandise and social media accounts. Allie graduated from The University of North Florida in Jacksonville, Florida with a Bachelor of Business Administration in Marketing. She was a part of Kappa Delta Sorority
- [Shena Phagan](https://velawood.com/staff_member/shena-phagan/) - Shena Phagan is a Paralegal at Vela Wood. Her role includes preparing and submitting entity filings with various State offices, corporate governance assistance, and transactional assistance. Shena graduated from Pulaski Technical College with an Associates of Arts in Paralegal Technology in 2004. Prior to working for Vela Wood, she was a Paralegal for 8 years

## Deals

- [Prophet Exchange](https://velawood.com/deal/prophet-exchange/) - MIXI, Inc., Ninjabet, Chicago Trading Company also participated. Prophet Exchange subsequently shut down in June 2024.
- [Wagr](https://velawood.com/deal/wagr/) - Had raised $16M from Seven Seven Six (Alexis Ohanian), Greycroft, Kraft Group, Justin Mateen (Tinder co-founder), Harris Blitzer Sports & Entertainment, BITKRAFT Ventures.
- [FTN Network](https://velawood.com/deal/ftn-network/) - Also acquired DFSForecast in September 2023 for undisclosed terms.
- [Betr](https://velawood.com/deal/betr-2/) - Jake Paul and Joey Levy participated from personal capital. Betr also acquired Chameleon betting platform from FansUnite for ~$7.45M around this time.
- [Novig](https://velawood.com/deal/novig-3/) - Y Combinator, Paul Graham, Joe Montana, Soma Capital, Innospark Ventures, Rebel Fund, Arash Ferdowsi (Dropbox co-founder), Bayhouse Capital, CapitalX, and others also participated.
- [Splash Sports](https://velawood.com/deal/splash-sports-2/) - Velvet Sea Ventures, K5, Elysian Park, Acies Investments, Accomplice, Counterview, and others also participated.
- [Fliff / Mojo Fantasy DFS](https://velawood.com/deal/fliff-mojo-fantasy-dfs/) - All-stock transaction. Fliff acquired Mojo's consumer platform technology and ~20 employees including Mojo's CTO.
- [Jackpocket](https://velawood.com/deal/jackpocket/) - 55% cash ($412.5M) + 45% DraftKings Class A stock ($337.5M). DraftKings projects $260M–$340M incremental revenue and $60M–$100M incremental Adjusted EBITDA in FY2026.
- [Betr](https://velawood.com/deal/betr/) - Florida Funders, Aliya Capital Partners, Eberg Capital (existing investors) also participated. Brings total Betr funding to $100M.
- [RotoUnderworld (FastDraft)](https://velawood.com/deal/rotounderworld-fastdraft/)
- [Sporttrade](https://velawood.com/deal/sporttrade-2/) - SIG made two separate prior growth capital investments in Sporttrade throughout 2023 before this announcement. SIG also providing liquidity and market-making on Sporttrade's exchange.
- [OddsJam (Odds Holdings, Inc.)](https://velawood.com/deal/oddsjam-odds-holdings-inc/) - $70M cash + $10M in Gambling.com ordinary shares at close. Up to additional $80M based on Odds Holdings' performance through end of 2026. Also included OpticOdds.
- [Underdog Fantasy](https://velawood.com/deal/underdog-fantasy-2/) - Electric Feel Ventures, Makai VC, McArthur Capital, Claridge Venture Partners also participated. Existing investors include BlackRock, Mark Cuban, Kevin Durant (Thirty Five Ventures), SV Angel.
- [Verse Fantasy](https://velawood.com/deal/verse-fantasy/)
- [Boyd Gaming (FanDuel Stake)](https://velawood.com/deal/boyd-gaming-fanduel-stake/) - Flutter purchased Boyd's 5% equity interest in FanDuel Group for $1.755B cash. Market-access agreements extended through 2038. Boyd used proceeds to repay existing debt.
- [Fantasy Life](https://velawood.com/deal/fantasy-life/) - Additional investors: Roger Ehrenberg (Eberg Capital), David Blitzer (Bolt Ventures), Gerry Cardinale (RedBird Capital), Jeff Shell (RedBird Capital Partners), Chad Hurley, Tony Khan, John Legend, Larry Fitzgerald Jr., Wasserman Ventures, Sum Ventures. Existing investors: Josh Allen, Joe Burrow, Ja'Marr Chase, Austin Ekeler. Follows $2M seed round in 2023.
- [Novig](https://velawood.com/deal/novig-2/) - Y Combinator, NFX, Perceptive Ventures, Gaingels also participated.
- [Prize Picks](https://velawood.com/deal/prize-picks/) - Allwyn acquiring ~62.3% stake for $1.6B cash. Selling shareholders may receive up to $1B additional in 2029 based on 2026–2028 metrics. PrizePicks operates as standalone brand under existing CEO Mike Ybarra. Co-founder Adam Wexler remains on board.
- [Fantasy National Golf Club](https://velawood.com/deal/fantasy-national-golf-club/) - Acquired from SportsHub Games Network. Pat Mayo joined Betsperts.
- [Splash Sports](https://velawood.com/deal/splash-sports/) - Evolution Partners, Boston Seed, Velvet Sea Ventures, and Green Wave Venture also participated.
- [Novig](https://velawood.com/deal/novig/) - Multicoin Capital, Makers Fund, Edge Equity, Forerunner, Perceptive Ventures, NFX also participated.
- [Genius Sports / Legend](https://velawood.com/deal/genius-sports-legend/) - $800M cash + $100M in Genius Sports shares at closing (deal closed April 30, 2026); up to $300M additional earnout. Legend owns Covers.com, Casino.org, and Casino Guru. Genius arranged a new $825M senior secured term loan and $220M revolving credit facility to fund the transaction. Sellers subject to six-month lock-up on shares received.
- [Underdog / Aristotle Exchange](https://velawood.com/deal/underdog-aristotle-exchange/) - Acquired Aristotle Exchange DCM, Inc. and Aristotle Exchange DCO, Inc., a CFTC-registered Designated Contract Market and Derivatives Clearing Organization. Aristotle's PredictIt platform was not part of the acquisition and remains separately operated. Deal followed a workforce reduction of more than 20% (~125 employees) at Underdog.
- [Underdog Fantasy](https://velawood.com/deal/underdog-fantasy/) - Additional Investors: Mark Cuban, Kevin Durant, Jared Goff, Adam Schefter, rappers Future, Gunna, Nas, Kygo, The Chainsmokers and Steve Aoki, Dapper Labs CEO Roham Gharegozlou, Harris Blitzer Sports & Entertainment, gaming research firm Eilers & Krejcik, Bleacher Report’s Adam Lefkoe, the Action Network, FantasyLabs, RotoGrinders, and SimpleBet.
- [Blok Sports](https://velawood.com/deal/blok-sports/) - Additional Investors: Andre Reed and Marshawn Lynch participated in the round.
- [SimpleBet](https://velawood.com/deal/simplebet/) - Additional Investors: Aristocrat Technologies, the San Francisco Giants, MGM Resorts Chairman Jim Murren, former Starbucks chief Howard Schultz, New Jersey Devilsminority co-owner David Blitzer, and tennis legend Andre Agassi also participated in the round.
- [Starting Eleven](https://velawood.com/deal/starting-eleven/) - Additional Investors: Fin Capital Angels and Permian Bank Capital also participated in this round.
- [PickUp](https://velawood.com/deal/pickup/) - Additional Investors: SuRo Capital, Drive by DraftKings and other undisclosed investors also participated in the round.
- [Jambos Picks](https://velawood.com/deal/jambos-picks/) - Additional Investors: Steve Duncker and other undisclosed investors also participated in this round.
- [Scientific Games Lottery](https://velawood.com/deal/scientific-games-lottery/) - Summary of Consideration: Total amount LBO; $5.825B in cash and an earn-out of up to $225M based on the achievement of certain EBITDA targets in 2022 and 2023.
- [Spin Games](https://velawood.com/deal/spin-games/) - Summary of Consideration: The Company will receive $10M in cash and $20M in common shares of Bragg, of which $5M worth of shares will be issued on closing, with the remainder over the next three years.
- [Sports Betting Dime](https://velawood.com/deal/sports-betting-dime/) - Summary of Consideration: An initial $11.0M upfront, together with up to $500K as reimbursement of SBD’s operating expenses per month from December 31, 2020, to the completion of the acquisition. A further $10.0M will be payable on the first anniversary of the deal, and then the final $3.7M after 18 months.
- [RotoWire](https://velawood.com/deal/rotowire/) - Summary of Consideration: $20.5M upfront; $7.5M deferred over a two-year period following close.
- [Monkey Knife Fight](https://velawood.com/deal/monkey-knife-fight/) - Summary of Consideration: MKF received immediately exercisable penny warrants to purchase up to approximately $50M in Bally's common shares (subject to adjustment) at closing, and contingent penny warrants to purchase up to approximately $20M in additional Bally's common shares on each of the first and second anniversaries of closing, for a possible total of up
- [Vigtory](https://velawood.com/deal/vigtory/) - Summary of Consideration: The purchase price was determined to be $10.3M, including $1.7M of Vigtory’s outstanding convertible notes and other liabilities settled by the Company on the closing date. This consideration does not include the $26.9M fair value of common shares issued to former employee shareholders of Vigtory that will vest over future service periods.
- [Ownersbox](https://velawood.com/deal/ownersbox/) - Additional Investors: Drew Brees participated in the round.
- [Sleeper](https://velawood.com/deal/sleeper/) - Additional Investors: Rainfall, Telstra Ventures, Leonis Capital, Rabil Ventures and Klay Thompson also participated in the round.
- [Compliable](https://velawood.com/deal/compliable/) - Additional Investors: KB Partners also participated in the round.
- [SharpRank](https://velawood.com/deal/sharprank/) - Additional Investors: Eilers & Krejcik Gaming, Sharp Alpha Advisors and Old Line Capital also participated in the round.
- [QL Gaming](https://velawood.com/deal/ql-gaming/) - Summary of Consideration: All cash.
- [The Action Network](https://velawood.com/deal/the-action-network/) - Summary of Consideration: All cash and debt free basis.
- [Golden Nugget Gaming](https://velawood.com/deal/golden-nugget-gaming/) - Summary of Consideration: All stock.
- [The Score Media Ventures](https://velawood.com/deal/the-score-media-ventures/) - Summary of Consideration: The Score shareholders received $17.00 per share in cash and 0.2398 shares of Penn National common stock for each the Score share, which implies a total purchase consideration of $34.00 per the Score share based on Penn National’s 5-day volume weighted average trading price as of July 30, 2021. Current Penn National
- [Boom Fantasy](https://velawood.com/deal/boom-fantasy/) - Additional Investors: New England Patriots owner Robert Kraft, Former MGM CEO Jim Murren, Eilers & Krejcik partner Chris Grove, ESPN analyst Adam Schefter, Golden Nugget Online Gaming and Rush Street Interactive also participated in the round.
- [ThriveFantasy](https://velawood.com/deal/thrivefantasy/) - Additional Investors: New York Angels members, Yolo Investments, Reflect Ventures and Stage 1 Ventures also participated in the round.
- [Lucra](https://velawood.com/deal/lucra/) - Additional Investors: Victress Capital, John Isner, Marc Lasry, Julie Ertz, Zach Ertz, and The 21 Fund also participated in the round.
- [PrizePicks](https://velawood.com/deal/prizepicks/) - Additional Investors: Other notable investors in the round include Matt Ryan, John Collins, Next Play Capital Partner Hunter Hillenmeyer, Bet.Works Founder Quinton Singleton, SportsGrid COO Adam Kaplan, Former NFL Executive Vishal Shah, and ThePostGame led by Eric Herd, co-founder and CEO, and David Katz, co-founder, chairman, and former head of FOX Sports Digital and Yahoo! Sports.
- [Bettor Fantasy](https://velawood.com/deal/bettor-fantasy/) - Additional Investors: NA
- [Hedge](https://velawood.com/deal/hedge/) - Additional Investors: NA
- [Match Bets](https://velawood.com/deal/match-bets/) - Additional Investors: NA
- [Kero Sports](https://velawood.com/deal/rush-sports/) - Additional Investors: Benjie Cherniak also participated in the round.
- [Linestar](https://velawood.com/deal/linestar/) - Additional Investors: Funded via SeedInvest.
- [PredictionStrike](https://velawood.com/deal/predictionstrike/) - Additional Investors: MaC Venture Capital also participated in the round.
- [Premier Turf Club](https://velawood.com/deal/premier-turf-club/) - Summary of Consideration: NA
- [GridRival](https://velawood.com/deal/gridrival/) - Additional Investors: ESPT Ventures, Sharp Alpha Advisors, Lloyd Danzig, Benjie Cherniak and other undisclosed investors also participated in the round.
- [Gaming Society](https://velawood.com/deal/gaming-society/) - Additional Investors: Other undisclosed investors also participated in the round.
- [HypGames](https://velawood.com/deal/hypgames/) - Additional Investors: DeepWork Capital and other undisclosed investors also participated in this round.
- [StatHero](https://velawood.com/deal/stathero/) - Additional Investors: NA
- [BetSperts](https://velawood.com/deal/betsperts/) - Additional Investors: Velo Partners, Parlay Capital Holdings, Thirtyfive Ventures, MLB players Evan Longoria, Adam Wainwright and David Price, NBA All-Stars Richard Jefferson and Chris Paul, NASCAR driver Kyle Busch, Grammy winner Darius Rucker, entrepreneur and Atlanta Hawks owner Jesse Itzler and Eric Norlin of SK Ventures also participated in the round.
- [Major League Fantasy](https://velawood.com/deal/major-league-fantasy/) - Summary of Consideration: Cash and stock.
- [Metric Gaming](https://velawood.com/deal/metric-gaming/) - Additional Investors: Existing investors also participated in this round.
- [Jock MKT](https://velawood.com/deal/jock-mkt/) - Additional Investors: Ryan Moore and Accomplice VC also participated in the round.
- [CBWG Sports](https://velawood.com/deal/cbwg-sports/) - Summary of Consideration: An initial $12M will be paid in cash and issue 8M new shares – at an aggregate value of $3.5M with a potential future contingent consideration of up to $9.5M, based on net revenue performance of the acquired business, payable over three years to the end of 2023.
- [Lineups.com](https://velawood.com/deal/lineups-com/) - Summary of Consideration: Payable in cash in three instalments during a two-year period. An additional contingent cash payment of $500K is payable if certain requirements are fulfilled within three years of the transaction date.
- [DRAFT](https://velawood.com/deal/draft/) - Summary of Consideration: $19M upfront, with a potential additional payout of $29M paid over a stipulated period of time per the terms of the deal.
- [USBookmaking](https://velawood.com/deal/usbookmaking/) - Summary of Consideration: $12M paid 50% in cash and 50% in shares of the Company and potential additional payout of up to $41.8M through December 31, 2025.
- [RotoGrinders](https://velawood.com/deal/rotogrinders/) - Summary of Consideration: $17.85M in cash and $3.15M in shares for a 60% stake. On November 4, 2021, Better Collective completed the acquisition of the remaining 40% share stake in RotoGrinders at a total price of $35.4M. The acquisition of the remaining 40% of the shares was paid through a $23.6M cash consideration.
- [Betcha Sports](https://velawood.com/deal/betcha-sports/) - Summary of Consideration: $25M upfront in Vivid Seats Equity, $40M based on earnings and payable in a combination of cash and stock.
- [VSiN](https://velawood.com/deal/vsin/) - Summary of Consideration: Cash and stock.
- [Bet.Works](https://velawood.com/deal/bet-works/) - Summary of Consideration: $62.5M in cash and $62.5M in Bally's common stock, which Bet.Works shareholders agreed to hold for at least one year.
- [SportTrade](https://velawood.com/deal/sporttrade/) - Additional Investors: Jump Capital, Impression Ventures, Hudson River Trading, Tower Research Ventures, Jim Murren, former CEO of MGM Resorts International and Tom Wittman, former CEO of the Nasdaq Stock Exchange also participated in the round.
- [Snapodds](https://velawood.com/deal/snapodds/) - Additional Investors: Undisclosed investors also participated in the round.
- [Synergy Sports](https://velawood.com/deal/synergy-sports/) - Additional Investors: Peter Guber, Todd Boehly, Eldridge and other undisclosed investors also participated in the round.
- [Draftea](https://velawood.com/deal/draftea/) - Additional Investors: Sequoia, Bullpen, and Nigel Eccles, founder and former CEO of sports-betting giant FanDuel also participated in the round.

## M &amp; A Glossary Terms

- [Liabilities](https://velawood.com/m-a-glossary-term/liabilities/) - Liabilities, in the mergers and acquisitions context, any and all debts, losses, damages, adverse claims, fines, penalties, liabilities or obligations of any kind, whether direct or indirect, absolute or contingent, accrued or unaccrued, matured or unmatured, determined or undeterminable, due or whether to become due or on- or off-balance sheet, and whether in contract, tort,
- [Subsidiary](https://velawood.com/m-a-glossary-term/subsidiary/) - A subsidiary is a company that is owned partially or fully by other company.
- [Unaccredited Investor](https://velawood.com/m-a-glossary-term/unaccredited-investor/) - Unaccredited Investor means any investor that does not meet the legal requirements to be an accredited investor.
- [Profit](https://velawood.com/m-a-glossary-term/profit/) - Profit means gross revenue minus expenses.
- [Material Adverse Effect](https://velawood.com/m-a-glossary-term/material-adverse-effect/) - Material Adverse Effect is a term of art used to denote materiality in a mergers and acquisitions transaction, specifically the negative effect that a particular event may have on a particular business or party. Often defined in the Purchase Agreement for the transaction.
- [Joinder](https://velawood.com/m-a-glossary-term/joinder/) - A Joinder references a document used to join a new party (such as a shareholder/member) to a document already executed by other parties. By way of example, a joinder may be used to add a new member to an Operating Agreement or Company Agreement.
- [Investment Advisers](https://velawood.com/m-a-glossary-term/investment-advisers/) - An Investment Adviser is an individual or company who is paid for providing advice about securities to a client. The individual/company must be registered with the Securities and Exchange Commission. Investment Advisers may assist clients with setting up and managing brokerage accounts, investing in companies or companies looking for investors, and mergers and acquisitions transactions.
- [Income Statement](https://velawood.com/m-a-glossary-term/income-statement/) - An Income Statement is a financial statement that shows a company's income and expenditures. It also reflects net profit/loss for a given period. An Income Statement is also called Profit and Loss Statement.
- [Fund Flow Statement](https://velawood.com/m-a-glossary-term/fund-flow-statement/) - A Fund Flow Statement is a financial statement prepared to analyse the reasons for changes in the financial position of a company between two balance sheets. It portrays the inflow and outflow of funds.
- [Formation Documents](https://velawood.com/m-a-glossary-term/formation-documents/) - Formation Documents include the basic documents signed and completed during the formation of a company. This will always include the Certificate of Formation, Articles of Incorporation/Organization, or Certificate of Incorporation/Organization. The Formation Documents may include items such as (2) Resignation; (3) EIN/Tax ID's; (4) Resolution, minutes, or consent for organizational matters; (5) Operating Agreement/Company Agreement
- [Expenses](https://velawood.com/m-a-glossary-term/expenses/) - Expenses are the cost or costs required for something or the money spent on something. In a mergers and acquisitions transaction, a company may be asked to itemize "Transaction Expenses" that are paid at closing from the cash received by the sellers, owners, or other parties to the transaction.
- [Effective Date](https://velawood.com/m-a-glossary-term/effective-date/) - The Effective Date means the date on which a document and its contents will go into legal effect. The Effective Date may be different in certain circumstances than the date the document is signed.
- [Duty Of Care](https://velawood.com/m-a-glossary-term/duty-of-care/) - Duty of care is the duty the directors/officers of a corporation owe to make decisions in the corporation's interests with reasonable diligence and prudence. Duty of care is defined in corporate statute or caselaw in many states.
- [Duty Of Loyalty](https://velawood.com/m-a-glossary-term/duty-of-loyalty/) - The Duty of Loyalty is the principle that directors and officers of a corporation, in making decisions in their capacities as officers and directors of the Corporation, must act without personal economic conflict. The duty of loyalty can be breached either by making a self-interested transaction or taking a corporate opportunity.
- [Divestiture](https://velawood.com/m-a-glossary-term/divestiture/) - Divestiture means the process of selling off subsidiary business interests, investments, or assets, many times to a third party. A Divestiture may also be used to spin off or split certain assets into two or more separate businesses.
- [Deadlock](https://velawood.com/m-a-glossary-term/deadlock/) - Deadlock is a situation, typically involving opposing parties, in which no progress can be made on a decision or issue. For a Company, deadlock may arise where a decision must be made by the managers/Board of Directors OR the members/shareholders and no group has sufficient votes to pass or reject a particular decision. Many times
- [Controlling Interest](https://velawood.com/m-a-glossary-term/controlling-interest/) - Controlling Interest generally means voting rights held by 1 person that constitute more than the necessary votes to pass most actions in a Company. Usually a Controlling Interest means more than 50% of the voting interests in a Company (at least a simple majority).
- [Assignee](https://velawood.com/m-a-glossary-term/assignee/) - An Assignee is the person receiving the assignment of the contract or asset.
- [Assignor](https://velawood.com/m-a-glossary-term/assignor/) - An Assignor is a person (whether individual or entity) assigning a contract or asset to another person
- [Participating Preferred Stock](https://velawood.com/m-a-glossary-term/participating-preferred-stock/) - Participating Preferred Stock is preferred stock that receives a liquidation preference, or a priority right upon the company’s liquidation (exit).
- [Tender Offer](https://velawood.com/m-a-glossary-term/tender-offer/) - A Tender Offer is an offer by an issuer or a third party to purchase a significant block of existing shares of a publicly or privately traded company.
- [Warrant](https://velawood.com/m-a-glossary-term/warrant/) - A 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 before a set expiration time or milestone.
- [Securities](https://velawood.com/m-a-glossary-term/securities/) - A Security is used to describe a tradable asset of any kind and generally represents an interest of equity in a company. Stock, membership units, and convertible notes are all forms of a security.
- [Securities Exchange Act of 1934](https://velawood.com/m-a-glossary-term/securities-exchange-act-of-1934/) - The Securities Exchange Act of 1934 regulates the sale of securities on secondary markets. The Act created the SEC and tasked it with regulating the securities markets. In order to protect investors and to provide transparency, stock exchange markets, brokerage companies and broker dealers, transfer agents, and companies wishing to sell securities all must register
- [Securities Exchange Act of 1933](https://velawood.com/m-a-glossary-term/sec-33-act/) - The Securities Act of 1933 was the first federal legislation regarding the registration of the sale of securities. The Act’s extensive registration and disclosure requirements allow potential investors to have all relevant information needed to make informed investments.
- [Right Of First Offer](https://velawood.com/m-a-glossary-term/right-of-first-offer/) - The Right of First Offer (ROFO) is a contractual obligation by the owner of an asset to negotiate the sale of the asset with the rights holder before offering sale of the asset to any third parties. In the context of startups, this usually gives an investor the right to purchase his or her pro-rata
- [Cliff](https://velawood.com/m-a-glossary-term/cliff/) - A Cliff is a term used to describe the length of time it takes for stock options or other securities on a vesting schedule to partially or fully vest.
- [4 Years with a 1-Year Cliff](https://velawood.com/m-a-glossary-term/4-years-with-a-1-year-cliff/) - 4 Years with a 1-Year Cliff is the typical vesting schedule used by startups. A one year cliff means that nothing vests for the first year, but after a year the vesting would catch-up to 12/48, and then the remaining balance would vest over three years (typically 1/36 a month for 36 months).
- [Registered Agent](https://velawood.com/m-a-glossary-term/registered-agent/) - A Registered Agent is the official “contact person” for a business. A business must officially designate a registered agent to receive and accept any lawsuits, notices, or other legal documents on behalf of the entity. Texas requires every entity to assign a registered agent before it is authorized to conduct business within the state.
- [Ordinary Income](https://velawood.com/m-a-glossary-term/ordinary-income/) - Ordinary Income Tax is a tax on income at rates published by the IRS. Ordinary income tax is generally significantly higher than capital gains tax.
- [Monthly Recurring Revenue](https://velawood.com/m-a-glossary-term/monthly-recurring-revenue/) - Monthly Recurring Revenue (MRR) is the amount of revenue a company generates from recurring payments in a single month.
- [Liquidation Preferences](https://velawood.com/m-a-glossary-term/liquidation-preferences/) - Liquidation Preference specifies which investors get paid first and how much they get paid in the event of a liquidation event, such as the sale of a company. Liquidation preference helps protect investors by making sure they get their initial investment back before other parties. Preferred stockholders have preference over common stockholders.
- [Overhang](https://velawood.com/m-a-glossary-term/overhang/) - Overhang is when preferred stock shareholders’ liquidation preference is greater than the amount of proceeds the company receives for liquidation. If there is overhang, none of the proceeds will be disbursed to the common shareholders.
- [Liquidation Event](https://velawood.com/m-a-glossary-term/liquidation-event/) - A Liquidation Event is typically defined as a sale of substantially all of the assets of the company (not in a bankruptcy scenario). In investment agreements, liquidation events often trigger investors’ rights regarding distributions, conversions, or preferences.
- [Indication Of Interest](https://velawood.com/m-a-glossary-term/indication-of-interest/) - An Indication of Interest (IOI) is a preliminary letter sent by a buyer (sometimes an investor) to indicate a basic level of interest. It’s one step past “nice to meet you,” but well short of a Letter of Intent, and no where close to a binding document. See also Letter of Intent (LOI) or Memorandum
- [Par Value](https://velawood.com/m-a-glossary-term/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 $0.0001.
- [Voting Rights](https://velawood.com/m-a-glossary-term/voting-rights/) - Voting Rights are the rights and/or obligations of a shareholder(s) to vote on certain corporate matters.
- [Vesting Schedule](https://velawood.com/m-a-glossary-term/vesting-schedule/) - A Vesting Schedule is the timeline over which a stock recipient's equity (usually stock options) vests. The typical vesting schedule is four years with a one year cliff. See Four Years with a One Year Cliff.
- [Vesting](https://velawood.com/m-a-glossary-term/vesting/) - Vesting is the period of time that securities (usually stock options) may be subject to forfeiture or repurchase based on meeting certain time or milestone criteria. Vesting co-founder equity helps to protect the company's equity - so that a departing co-founder doesn't depart with a lot of equity, but rather only the equity that has
- [Vested](https://velawood.com/m-a-glossary-term/vested/) - Vested refers to the amount of equity that a recipient (i.e. an employee) owns and is no longer subject to forfeiture. Typically, stock options "vest" as the employee continues her employment with a startup, meaning that the employee can now exercise the options and own the stock outright.
- [Venture-Backed Startup](https://velawood.com/m-a-glossary-term/venture-backed-startup/) - Venture-Backed Startups are startups receiving venture capital funding. Most companies do not receive venture capital in early rounds of financing until they have proved the company is viable.
- [Venture Debt](https://velawood.com/m-a-glossary-term/venture-debt/) - Venture Debt is a bank lending to startups. Because startups are so risky, they generally do not qualify for traditional bank loans until much later in their life cycle. There are, however, a handful of banks who will lend to startups as part of a large venture round.
- [Venture Capitalist (VC)](https://velawood.com/m-a-glossary-term/venture-capitalist-vc/) - A Venture Capitalist (VC) is a person whose job is investing in startups - a professional investor, so to speak. Venture capitalists work for venture capital firms.
- [Venture Capital Fund](https://velawood.com/m-a-glossary-term/venture-capital-fund/) - Venture Capital Funds are investment funds that invest in startups and seek high returns in exchange for the risky nature of investing in startups.
- [Venture Capital](https://velawood.com/m-a-glossary-term/venture-capital/) - Venture Capital is capital provided by investors to startups. Startups are inherently risky due to their likelihood of early failure. Because of the high risk, investors may achieve greater returns.
- [Unvested](https://velawood.com/m-a-glossary-term/unvested/) - The term is used to describe the status of securities that remain subject to forfeiture or mandatory buyback provisions, even after being set aside for, or granted to, an individual. Unvested securities typically transform into vested securities, which are not subject to forfeiture or buyback, over time or upon the meeting of certain benchmarks or
- [Unsecured Debt](https://velawood.com/m-a-glossary-term/unsecured-debt/) - Unsecured Debt is debt that is not backed by collateral in any of the assets of a company. Since the debt is not secured by any specific assets as collateral, any debt secured by specific collateral will take priority over the unsecured debt in the event of dissolution of the startup and sale of its
- [Unanimous Written Consent (UWC)](https://velawood.com/m-a-glossary-term/unanimous-written-consent-uwc/) - Short for Action by Unanimous Written Consent, a UWC is a legal document that memorializes the unanimous consent of the board of directors and/or members of a corporate entity on a specific issue or action.
- [Super Majority](https://velawood.com/m-a-glossary-term/super-majority/) - A Super Majority is a designated percentage (usually 67%) required to take certain actions - usually major decisions like selling the company.
- [Subordinated Debt](https://velawood.com/m-a-glossary-term/subordinated-debt/) - Subordinated Debt is debt that ranks lower in priority than another particular debt if a company falls into bankruptcy or has to liquidate. You may also see it referred to as "junior debt," a "junior security," or a "subordinated loan."
- [Stock Purchase Agreement (M&A)](https://velawood.com/m-a-glossary-term/stock-purchase-agreement-ma/) - A Stock Purchase Agreement is a purchase agreement for the sale of stock of a corporation to a buyer.
- [Stock Purchase Agreement (Generally)](https://velawood.com/m-a-glossary-term/stock-purchase-agreement-generally/) - A Stock Purchase Agreement is a legally binding contract whereby a purchaser (oftentimes an investor) agrees to purchase shares of a company in exchange for consideration. The consideration is almost always cash, but it could be services or a promissory note, or an exchange of some kind.
- [Stock Plan](https://velawood.com/m-a-glossary-term/stock-plan/) - A Stock Plan is a company's equity compensation plan. The company issues equity through Incentive Stock Options, Non-Qualified Stock Options, or Restricted Stock Agreements. The incentives are usually tied to achieving a goal or staying with the company for some period of time.
- [Stock Options](https://velawood.com/m-a-glossary-term/stock-options/) - Stock Options are an option to purchase a fixed amount of shares at a fixed price that typically vest over time.
- [Startup](https://velawood.com/m-a-glossary-term/startup/) - A Startup is a newly formed company. The term can refer to any entity structure and references the company's life cycle. A startup will generally seek outside capital and plan for a rapid growth trajectory.
- [Spinoff](https://velawood.com/m-a-glossary-term/spinoff/) - A Spinoff is a type of divestiture in which a division or subsidiary is separated from its parent firm to create a new corporate entity by issuing new shares. These shares are distributed to the current stockholders (shareholders) in proportion to their current shareholdings and may also be sold to the public.
- [Sole Proprietor and Sole Proprietorship](https://velawood.com/m-a-glossary-term/sole-proprietor-and-sole-proprietorship/) - A Sole Proprietor is an individual who undertakes to engage in business without partners and without organizational forethought. This does not mean that you have one person, but that you have one owner. There is almost never a reason to operate as a sole proprietorship, as a sole proprietorship does not offer the liability protection
- [Small Business Administration (SBA)](https://velawood.com/m-a-glossary-term/small-business-administration-sba/) - The Small Business Administration (SBA) is a government agency that provides support to small businesses. The mission of the SBA is "to maintain and strengthen the nation's economy by enabling the establishment and viability of small businesses and by assisting in the economic recovery of communities after disasters."
- [Single Materiality Scrape](https://velawood.com/m-a-glossary-term/single-materiality-scrape/) - A Single Materiality Scrape is where materiality qualifiers are disregarded when determining if there is a breach, or the amount of damages, but not both items. It is most common to see materiality qualifiers disregarded when determining damages.
- [Simple Majority](https://velawood.com/m-a-glossary-term/simple-majority/) - A Simple Majority means more than 50% of shares or members who can vote to make a decision.
- [Side Letter](https://velawood.com/m-a-glossary-term/side-letter/) - A Side Letter is an agreement between a company and a specific investor that alters the terms of the offering documents for that investor only, typically by providing the investor with additional rights or excluding the investor from certain obligations.
- [Shareholders' Agreement (SHA)](https://velawood.com/m-a-glossary-term/shareholders-agreement-sha/) - A Shareholders' Agreement (SHA) is an agreement among a company's shareholders that sometimes exists in startups. While most of the shareholders' rights are laid out in the formation documents, the shareholder agreement may supplement these documents and further provide how the shareholders will vote, solve disputes, and other rights.
- [Seniority](https://velawood.com/m-a-glossary-term/seniority-2/) - Seniority means a senior interest or debt has a higher priority than a junior interest or debt.
- [Senior Debt](https://velawood.com/m-a-glossary-term/senior-debt/) - Senior Debt is debt that will be paid back before any other debt. It is said to be "senior" to other junior debt that has a lower priority in regard to proceed distributions from a liquidation event.
- [Sellers Representative or Shareholders Representative](https://velawood.com/m-a-glossary-term/sellers-representative-or-shareholders-representative/) - The Sellers Representative or Stockholder Representative is an individual or commercial entity appointed to represent the interests of a group of sellers/stockholders after the sale of a target company, usually by means of an equity sale.
- [Seller’s knowledge](https://velawood.com/m-a-glossary-term/sellers-knowledge/) - Seller's Knowledge mean the actual knowledge and/or construction knowledge of the Seller.
- [Security Interest](https://velawood.com/m-a-glossary-term/security-interest/) - A Security Interest is a legal right in collateral given to a creditor. If the debtor fails to fulfill its obligations to the creditor, the creditor can force the sale of the collateral and collect what it is owed from the debtor.
- [Securities and Exchange Commission (SEC)](https://velawood.com/m-a-glossary-term/securities-and-exchange-commission-sec/) - The Securities and Exchange Commission (SEC) is the federal regulatory agency that enforces federal securities laws (such as Sarbanes-Oxley, the Securities Act of 1933, the Securities Exchange Act of 1934, and other securities regulation), proposes rules for the regulation of securities, and regulates the nation's stock and option exchanges. The SEC works to maintain fair,
- [Secured Debt](https://velawood.com/m-a-glossary-term/secured-debt/) - Secured Debt is debt that guarantees some repayment because it is tied to some or all of a company's assets as collateral. If the debtor defaults, the creditor can obtain a lien against the collateral.
- [Section 338(h)(1) election](https://velawood.com/m-a-glossary-term/section-338h1-election/) - A Section 338h)(10) Election is a tax election that allows certain types of taxpayers to treat an acquisition of the equity of a target company (which must be a corporation or s-corporation) as an asset sale for tax purposes.
- [Section 336(e) Election](https://velawood.com/m-a-glossary-term/section-336e-election/) - A Section 336(e) Election is a tax election that allows certain types fo taxpayers to treat an acquisition of the equity of a target company (which must be a corporation or s-corporation) as an asset sale for tax purposes.
- [Secondary Buyout](https://velawood.com/m-a-glossary-term/secondary-buyout/) - A Secondary Buyout is a private sale by a VC or private equity firm of its stake in a startup (or part or all of its entire portfolio) to another VC or private equity firm. See Tender Offer.
- [SAFE](https://velawood.com/m-a-glossary-term/safe/) - SAFE is an acronym for "simple agreement for future equity," which is an alternative to the issuance of convertible debt.
- [S-Corporation](https://velawood.com/m-a-glossary-term/s-corporation/) - An S-Corporation is a form of corporation that meets the IRS requirements to elect pass through taxation. The corporation can pass income directly to shareholders. S-corporations can be very valuable in limited instances. They are not typically recommended for startups, but may make sense for some small businesses (particularly services businesses). Please consult with an
- [Rollup](https://velawood.com/m-a-glossary-term/rollup/) - A Rollup is an acquisition or merger of a smaller company by a larger company in the same market. The larger companies often purchase the smaller companies to optimize their production and distribution channels.
- [Revenue](https://velawood.com/m-a-glossary-term/revenue/) - Revenue is money that is brought into a company by its business activities (typically from sales).
- [Restricted Stock Purchase Agreement (RSPA)](https://velawood.com/m-a-glossary-term/restricted-stock-purchase-agreement-rspa/) - A Restricted Stock Purchase Agreement (RSPA) is an agreement issuing restricted stock. RSPAs are typically granted to founders to prevent the founder from leaving the company prematurely and taking a lot of the ownership with her. The RSPA establishes when the shares will fully vest and belong to the founder. Typically, the RSPA will vest
- [Restricted Stock](https://velawood.com/m-a-glossary-term/restricted-stock/) - Restricted Stock is ownership shares of a corporation that are unregistered. Because these shares are unregistered, the stock is non-transferable and can only be transferred in compliance with certain SEC regulations. Restricted stock is most commonly granted to executives, directors, and founders of the company. In an LLC, restricted units are the functional equivalent of
- [Reserved Shares](https://velawood.com/m-a-glossary-term/reserved-shares/) - Reserved Shares are company shares that are reserved for some internal purpose and will not be issued to shareholders. Some shares are required to be reserved. For example, if a company issues preferred stock, the company must reserve enough shares for the preferred stock to convert into common shares.
- [Representations and Warranties Insurance](https://velawood.com/m-a-glossary-term/representations-and-warranties-insurance/) - Representations and Warranties Insurance is commercial insurance obtained by a buyer and/or seller during an acquisition transaction to cover certain indemnification obligations of a seller post transaction. Like most other types of insurance, Representations and Warranties Insurance has a premium payment, deductible, and types of claims that a covered and not covered.
- [Representations and Warranties](https://velawood.com/m-a-glossary-term/representations-and-warranties/) - Representations and Warranties are certifications of certain important facts by a party to an agreement to the other party to the agreement.
- [Registration](https://velawood.com/m-a-glossary-term/registration/) - Registration is the process of notifying the SEC that the company plans to sell shares to the public and to register the shares with the SEC under the Securities Act of 1933.
- [Recurring Revenue](https://velawood.com/m-a-glossary-term/recurring-revenue/) - Recurring Revenue is the measure of revenue components that are recurring in nature. This excludes one-time (non-recurring) fees and professional service fees.
- [Qualified Small Business Stock - Section 1202 of Internal Revenue Code](https://velawood.com/m-a-glossary-term/qualified-small-business-stock-section-1202-of-internal-revenue-code/) - Section 1202 of the Internal Revenue Code provides for beneficial tax treatment for investors who purchase Qualified Small Business Stock (QSBS) in a company. If a stock qualifies as QSBS, investors may exclude up to 100% of the federal capital gains tax associated with the sale of the QSBS, subject to certain limitations. In order
- [QSub](https://velawood.com/m-a-glossary-term/qsub/) - A Qsub is an S-Corporation subsidiary of another S-Corporation (parent).
- [Purchase Price](https://velawood.com/m-a-glossary-term/purchase-price/) - Purchase Price refers to cash and other property/assets paid in a transaction.
- [Public Offering](https://velawood.com/m-a-glossary-term/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](https://velawood.com/m-a-glossary-term/public-company/) - A Public Company is a corporation whose securities are traded on a public exchange. These securities must be registered with the SEC.
- [Promissory Note](https://velawood.com/m-a-glossary-term/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.
- [Pro-Rata](https://velawood.com/m-a-glossary-term/pro-rata/) - 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 company, he/she will have the ability to buy 5% of the securities in the new
- [Profits Interest Plan](https://velawood.com/m-a-glossary-term/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 future profits of the company after the date of the grant (hence, incentive units are
- [Pro Forma](https://velawood.com/m-a-glossary-term/pro-forma/) - Pro Forma is generally a financial statement or cap table provided to investors that shows the company's financial structure or capitalization structure if certain assumptions are accepted as true.
- [Private Company](https://velawood.com/m-a-glossary-term/private-company/) - A Private Company is a company whose shares are privately sold and owned and are not traded on a public market. Unlike public companies, private companies' stock is often owned by a few shareholders.
- [Preferred Stock](https://velawood.com/m-a-glossary-term/preferred-stock/) - 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.
- [Preferred Return](https://velawood.com/m-a-glossary-term/preferred-return/) - 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.
- [Preemptive Rights](https://velawood.com/m-a-glossary-term/preemptive-rights/) - 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.
- [Pass Through Entity](https://velawood.com/m-a-glossary-term/pass-through-entity/) - 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 companies.
- [Partnership](https://velawood.com/m-a-glossary-term/partnership/) - 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 through taxation. Partnerships are rarely intentionally created now because of other limited liability options that
- [Outstanding Shares](https://velawood.com/m-a-glossary-term/outstanding-shares/) - Outstanding Shares refers to the number of shares that a company has issued to shareholders (including founders, investors, advisors, and option holders).
- [Option Pool](https://velawood.com/m-a-glossary-term/option-pool/) - An Option Pool is a group of shares reserved by the company for long-term compensation to management and employees.
- [Option Plan](https://velawood.com/m-a-glossary-term/option-plan/) - An Option Plan is a plan created by a company to issue stock options to its employees and service providers.
- [Non-Solicitation Agreement](https://velawood.com/m-a-glossary-term/non-solicitation-agreement/) - Non-Solicitation Agreements are usually in employment agreements to prevent the contracting employee from soliciting the company's other employees and the company's customers for a competing business venture.
- [Non-Qualified Stock Option (NQSO or NSO)](https://velawood.com/m-a-glossary-term/non-qualified-stock-option-nqso-or-nso/) - A Non-Qualified Stock Option (NQSO or NSO) is a stock option that does not qualify for treatment as an incentive stock option under the Internal Revenue Code. Accordingly, when the option is exercised, the holder will pay ordinary income tax on the difference between the exercise price and the grant price.
- [Non-Disclosure Agreement (NDA)](https://velawood.com/m-a-glossary-term/non-disclosure-agreement-nda/) - A Non-Disclosure Agreement (NDA), also known as a confidentiality agreement, is a contract in which a party agrees to protect confidential information from disclosure to other parties. Be leery of asking investors to sign NDAs; they see too many deals and chances are that your startup is not unique.
- [Non-Compete Agreement](https://velawood.com/m-a-glossary-term/non-compete-agreement/) - A Non-Compete is an agreement signed by employees and management prohibiting the individual from working for or forming a competing company. Non-competes include a specified geographic region and last for a specified time period after termination.
- [Mergers and Acquisition (M&A)](https://velawood.com/m-a-glossary-term/mergers-and-acquisition-ma/) - Mergers and Acquisition (M&A) is a term used to refer to the corporate strategy involved in the consolidation of companies.
- [Memorandum of Understanding](https://velawood.com/m-a-glossary-term/memorandum-of-understanding/) - A Memorandum of Understanding is similar to a Letter of Intent and may be used by the parties to indicate the material points of a deal in a non-binding manner prior to executing and negotiating definitive agreements.
- [Membership Interest Purchase Agreement](https://velawood.com/m-a-glossary-term/membership-interest-purchase-agreement/) - A Membership Interest Purchase Agreement is an equity purchase agreement to purchase the Membership Interests or Membership Units of an LLC.
- [Materiality Scrape](https://velawood.com/m-a-glossary-term/materiality-scrape/) - A Materiality Scrape is a provision generally found in purchase agreements (i.e. stock purchase agreement, asset purchase agreement, merger agreement, etc.) that effectively eliminates any materiality qualifiers in representations and warranties for determining whether a breach has occurred in regard to indemnification provisions.
- [Materiality Qualifier](https://velawood.com/m-a-glossary-term/materiality-qualifier/) - Materiality Qualifier is modifying a part of a contract to require a higher threshold. For example, a "material" breach of a contract requires the bad actor to commit a greater wrong than just a breach of any term of the contract.
- [Material Adverse Change Clause](https://velawood.com/m-a-glossary-term/material-adverse-change-clause/) - Material Adverse Change Clause is a contractual provision that states the transaction will not take place if some event occurs. These provisions are found in venture financings.
- [Holding Company](https://velawood.com/m-a-glossary-term/holding-company/) - A Holding Company is an entity created for the purpose of owning entities and assets.
- [Majority Shareholder](https://velawood.com/m-a-glossary-term/majority-shareholder/) - A Majority Shareholder is a shareholder who owns more shares in the company than any other shareholder.
- [Major Investors](https://velawood.com/m-a-glossary-term/major-investors/) - Major Investors are investors who own a large portion of a company's shares and as such receive preferential rights. The amount of shares necessary to become a major investor varies among financial documents and companies.
- [M&A Transaction](https://velawood.com/m-a-glossary-term/ma-transaction/) - An M&A transaction is a merger or acquisition transaction whereby one party purchases the assets or stock of another, and/or two parties merge together into one entity.
- [Losses](https://velawood.com/m-a-glossary-term/losses/) - Losses means claims, losses, liabilities, damages, deficiencies, Taxes, costs, interest, awards, judgments, penalties and expenses, including reasonable attorneys’ and consultants’ fees and expenses, and including any such expenses incurred in connection with investigating, defending against or settling any of the foregoing.
- [Lock-up Period](https://velawood.com/m-a-glossary-term/lock-up-period/) - A Lock-up Period is a mutually agreed upon period of time following an IPO that founders, key employees, and investors are restricted from selling their shares in the company.
- [Limited Partnership (LP)](https://velawood.com/m-a-glossary-term/limited-partnership-lp/) - A Limited Partnership (LP) has two classes of partners: General Partners and Limited Partners. General Partners in an LP are like General Partners in a conventional partnership (i.e., have personal liability for the debts of the business). Limited Partners are not liable for debts of the business.
- [Limited Partners (LPs)](https://velawood.com/m-a-glossary-term/limited-partners-lps/) - Limited Partners (LPs) are partners in a limited partnership that are not personally liable for the company's debts or liabilities. The limited partner invests in the company but cannot exercise control over the day-to-day operations of the company. If the limited partner does exercise such control, the limited partner may lose its limited liability protection.
- [Limited Liability Partnership (LLP)](https://velawood.com/m-a-glossary-term/limited-liability-partnership-llp/) - A Limited Liability Partnership (LLP) is a General Partnership with an important modification: the partners are not personally liable for all debts and obligations, except to the extent they have agreed bear personal fault.
- [Limited Liability Company (LLC)](https://velawood.com/m-a-glossary-term/limited-liability-company-llc/) - An Limited Liability Company (LLC) is the best of both worlds when it comes to entities. An LLC offers the benefits of limited liability, taxations as a partnership, and management flexibility. An LLC can elect to be "manager-managed" or "member-managed."
- [License](https://velawood.com/m-a-glossary-term/license/) - A License is an agreement between an intellectual property owner and an individual or entity for the use of the intellectual property. The individual or entity does not purchase the intellectual property, but just the right to use or benefit from the intellectual property for a certain period of time and only for certain uses.
- [Letter of Intent (LOI)](https://velawood.com/m-a-glossary-term/letter-of-intent-loi/) - A Letter of Intent (LOI) is a document that indicates the material points of a deal, or intent of the parties. It is typically non-binding and a precursor to more definitive documents; though it is not uncommon for certain provisions (like confidentiality, exclusive negotiation period, or break-up fees) to be binding. See also Indication of
- [Leaseholds](https://velawood.com/m-a-glossary-term/leaseholds/) - An agreement to lease real property or personal property, typically for a fixed period of time.
- [Lapsed Option](https://velawood.com/m-a-glossary-term/lapsed-option/) - A Lapsed Option is an option that can no longer be exercised because some necessary condition has expired. Often stock options are granted but have a finite time period within which the options must be exercised. Once the finite period ends, the options that have not been exercised are said to "lapse."
- [Key Employee](https://velawood.com/m-a-glossary-term/key-employee/) - A Key Employee is an employee who plays a significant part in a startup's success and has a major ownership and/or decision-making role in the business. Key employees are usually founders and C-level executives. Key employees may have certain restrictions or be tied to certain provisions in a later-stage financing round.
- [Junior Debt](https://velawood.com/m-a-glossary-term/junior-debt/) - Junior Debt is debt that is a lower priority to senior debt. Junior debt is also known as "Subordinated Debt."
- [Jointly and severally](https://velawood.com/m-a-glossary-term/jointly-and-severally/) - Jointly and severally is a term used in acquisition agreements where more than one party will be responsible for indemnification. Jointly and Severally refers to the fact that both parties are responsible for the entire item, rather than only their pro-rata share based on ownership of the company.
- [Issuer](https://velawood.com/m-a-glossary-term/issuer/) - An Issuer is an entity that has "issued" or sold its securities.
- [Issued Shares](https://velawood.com/m-a-glossary-term/issued-shares/) - Issued Shares are the amount of shares the company has sold or granted to shareholders.
- [IPO](https://velawood.com/m-a-glossary-term/ipo/) - An IPO is an initial public offering of a company.
- [Investor Rights Agreement (IRA)](https://velawood.com/m-a-glossary-term/investor-rights-agreement-ira/) - An Investor Rights Agreement (IRA) is an agreement between an investor and a company that contractually guarantees the investor certain rights including, but not limited to, voting rights, inspection rights, rights of first refusal, and observer rights.
- [Inventory](https://velawood.com/m-a-glossary-term/inventory/) - Inventory means physical assets maintained by a company for sale to customers/clients in the ordinary course of business.
- [Invention Assignment](https://velawood.com/m-a-glossary-term/invention-assignment/) - An Invention Assignment is an agreement where a founder or developer assigns to the company all of the intellectual property the founder or developer has created related to the company.
- [Interest](https://velawood.com/m-a-glossary-term/interest/) - Interest is a fee paid at a particular rate for borrowing money from a lender.
- [Intellectual Property](https://velawood.com/m-a-glossary-term/intellectual-property/) - Intellectual Property is intangible property such as a process, a design, a code, company secrets, or images that are protected by patent and copyright law.
- [Initial Public Offering (IPO)](https://velawood.com/m-a-glossary-term/initial-public-offering-ipo/) - An Initial Public Offering (IPO) is the first sale of a company's stock on a public stock exchange. The company must comply with stringent SEC requirements to be eligible to be a publicly traded company. And, in most instances, a startup has been very successful if it reaches an initial public offering.
- [Independent Contractor](https://velawood.com/m-a-glossary-term/independent-contractor/) - An Independent Contractor is a service provider under a contract, but unlike employees, the independent contractor controls how the service is performed. Whether the service provider controls the performance and is an independent contractor or whether the service provider does not have control over the performance is determined using a factored analysis in most states.
- [Indemnity](https://velawood.com/m-a-glossary-term/indemnity/) - Indemnity is a company's agreement to pay another party's losses under a contract regardless of whether the company caused the losses.
- [Indemnification Cap](https://velawood.com/m-a-glossary-term/indemnification-cap/) - 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 typically present in a sale or purchase agreement.
- [Indemnification](https://velawood.com/m-a-glossary-term/indemnification/) - 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 who caused the harm must compensate the company for the money the company paid to
- [Incorporation](https://velawood.com/m-a-glossary-term/incorporation/) - Incorporation is the act of incorporating a company through filing a required document with the secretary of state and paying an incorporation fee.
- [Incentive Unit Plan](https://velawood.com/m-a-glossary-term/incentive-unit-plan/) - 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 the company after the date of the grant (hence, incentive units are also known as
- [Incentive Stock Option (ISO)](https://velawood.com/m-a-glossary-term/incentive-stock-option-iso/) - 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 the options, as opposed to when the options are exercised. Also, the shareholder is not
- [Hurdle Price](https://velawood.com/m-a-glossary-term/hurdle-price/) - The Hurdle Price is the price associated with an incentive unit in an LLC. Incentive unit holders are entitled to distributions only when each non-incentive unit holding member of the company receives distributions per unit in an amount equal to the hurdle price.
- [Holding Period](https://velawood.com/m-a-glossary-term/holding-period/) - A Holding Period is the amount of time that a person or entity owns an asset or security.
- [Holdback Escrow](https://velawood.com/m-a-glossary-term/holdback-escrow/) - A Holdback Escrow is a portion of the purchase price that a purchase does not immediately give to the seller upon closing to ensure that there are no post-closing issues with any of the representations and warranties of the seller. The purchaser places the holdback escrow in a third-party escrow account until the holdback period
- [Holdback](https://velawood.com/m-a-glossary-term/holdback/) - A Holdback is a portion of the purchase price that a purchaser does not immediately give to the seller upon closing in order to ensure that there are no post-closing issues with any of the representations and warrants of the seller. See Holdback Escrow.
- [Gross Profit](https://velawood.com/m-a-glossary-term/gross-profit/) - Gross Profit is the profit a company makes after deducting the costs associated with making and selling products and/or providing services.
- [Generally Accepted Accounting Principles (GAAP)](https://velawood.com/m-a-glossary-term/generally-accepted-accounting-principles-gaap/) - Generally Accepted Accounting Principles (GAAP) are mandatory financial accounting procedures and methods that public companies must comply with when reporting their financials. Private companies are not required to use GAAP as their accounting method, but many do.
- [General Solicitation](https://velawood.com/m-a-glossary-term/general-solicitation/) - General Solicitation is a company or fund publicly advertising its securities. General solicitations offer the potential to reach more investors. However, general solicitation may cause the company to have to comply with more stringent security registration requirements at the state and federal levels.
- [General Partnership](https://velawood.com/m-a-glossary-term/general-partnership/) - A General Partnership is the default entity under most jurisdictions. When two or more entrepreneurs join together to operate a business, they have wittingly, or unwittingly, formed a general partnership. There is no need to file any document with the state to formalize or legitimize their undertaking. You want to avoid a general partnership.
- [General Partner (GP)](https://velawood.com/m-a-glossary-term/general-partner-gp/) - A General Partner (GP) is a partner in a partnership. In limited partnerships, there are general partners, who manage the day-to-day operations of the partnership, and limited partners, who invest in the partnership but are not allowed to control the day-to-day operations or they risk becoming a general partner. Unlike limited partners, general partners do
- [Fully-Diluted Basis](https://velawood.com/m-a-glossary-term/fully-diluted-basis/) - Fully-Diluted Basis is the total number of shares that would be outstanding if all securities that could convert into shares, such as convertible notes, options, warrants, and preferred shares, converted to common stock. Investors oftentimes want to know what their ownership will look like on a basic and a fully-diluted basis.
- [Founders Stock](https://velawood.com/m-a-glossary-term/founders-stock/) - Founders Stock refers to equity granted to a founder when the company is formed. The equity typically has a par value that is next to nothing and a four year vesting schedule.
- [Founder](https://velawood.com/m-a-glossary-term/founder/) - A Founder creates or participates in the formation stage of a startup. Founders receive the startup's initial shares in return for a capital contribution or services provided to the company.
- [Finder's Fee](https://velawood.com/m-a-glossary-term/finders-fee/) - A Finder's Fee is a commission paid to a third-party for facilitating successful transactions, whether acquisitions or M&A, between a startup, investors, or potential partners.
- [Finder](https://velawood.com/m-a-glossary-term/finder/) - A Finder is an individual who facilitates transactions, whether acquisitions or M&A, between companies and other parties.
- [Fiduciary Duty](https://velawood.com/m-a-glossary-term/fiduciary-duty/) - Fiduciary Duty is the legal and ethical duty that an individual has to an entity, which includes the duty of care and the duty of loyalty.
- [Fair Market Value](https://velawood.com/m-a-glossary-term/fair-market-value/) - Fair Market Value is the price that a reasonable third-party would pay for a given asset in the open market.
- [F-Reorganization](https://velawood.com/m-a-glossary-term/f-reorganization/) - An F-Reorganization is a type of tax free reorganization under Section 368(a)(1)(F) of the Internal Revenue Code. An F-Reorganization is a change of form, not substance of the entity.
- [Expenses Section (M&A)](https://velawood.com/m-a-glossary-term/expenses-section-ma/) - An Expenses Provision is a section in a letter of intent or memorandum of understanding that sets out the liability of each party with respect to the expenses associated with due diligence and negotiating the transaction documents in the event that a transaction does not close. Typically the Buyer wishes for the Seller to pay
- [Exit Event](https://velawood.com/m-a-glossary-term/exit-event/) - An Exit Event is an event where founders and early investors can sell their interest in a company for cash. An exit can be an initial public offering (IPO) or an acquisition by another company.
- [Exercising Stock Options](https://velawood.com/m-a-glossary-term/exercising-stock-options/) - Exercising Stock Options means the option holder purchases the underlying stock, at the exercise price, in accordance with the option agreement.
- [Exercise Price](https://velawood.com/m-a-glossary-term/exercise-price/) - The Exercise Price is the price per share at which an option is exercised, i.e. the price at which the option holder can buy or sell the underlying security.
- [Exclusivity Provision](https://velawood.com/m-a-glossary-term/exclusivity-provision/) - An Exclusivity Provision is a binding provision in a letter of intent or memorandum of understanding that one party (typically the seller) will not negotiate with or entertain offers to sell the assets or stock of the seller company from any other party other than the Buyer for a fixed period of time. This may
- [Escrow](https://velawood.com/m-a-glossary-term/escrow/) - Escrow describes documents, funds, and/or other assets being held by a third party until the parties of the transaction have satisfied certain obligations.
- [Equity Purchase Agreement](https://velawood.com/m-a-glossary-term/equity-purchase-agreement/) - An acquisition agreement where the sellers are selling their stock, membership interests/units, partnership interests, or similar, rather than the assets of the company. An Equity Purchase Agreement may also be called a Membership Interest Purchase Agreement or a Stock Purchase Agreement, or variants thereof.
- [Equity Consideration](https://velawood.com/m-a-glossary-term/equity-consideration/) - Equity Consideration is when the sellers in an acquisition transaction receive all or part of their purchase price payment in equity (stock, membership interests, partnership interests, or similar) of another company, which is usually the buyer or the buyer parent company.
- [Equity](https://velawood.com/m-a-glossary-term/equity/) - Equity broadly refers to the ownership of a company, which can be represented by stock or other units of ownership. When an investor has ownership of a company, he or she has equity in the company.
- [Encumbrances](https://velawood.com/m-a-glossary-term/encumbrances/) - An Encumbrance is a claim made against a property by someone other than the current titleholder of the property. Examples of encumbrances include leases, liens, easements, mortgages, deeds of trust, or similar devices.
- [Employee](https://velawood.com/m-a-glossary-term/employee/) - An Employee is, in most states in the United States of America, an individual who works for a company where the company controls the manner, means, equipment, and timing of the performance of the work. Most employees receive payment for the services as W2 compensation.
- [Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA)](https://velawood.com/m-a-glossary-term/earnings-before-interest-tax-depreciation-and-amortization-ebitda/) - EBITDA is essentially net income with interest, taxes, depreciation, and amortization added back to it.
- [Earnings Before Interest and Taxes (EBIT)](https://velawood.com/m-a-glossary-term/earnings-before-interest-and-taxes-ebit/) - Earnings Before Interest and Taxes (EBIT) is an operating profit metric. The EBIT is determined by excluding interest and taxes from expenses and then subtracting those expenses from revenues. Companies' values are often projected as multiples of EBIT.
- [Due Diligence](https://velawood.com/m-a-glossary-term/due-diligence/) - Due Diligence is the process an investor or buyer goes through prior to making an investment in a company. This typically includes meeting and interviewing the founders and key stakeholders, reviewing company documents and financials, and interviewing customers, when applicable.
- [Drag Along Rights](https://velawood.com/m-a-glossary-term/drag-along-rights/) - Drag Along Rights are the rights of majority investors who are selling their equity in the company to force minor investors to sell their equity interest as well.
- [Double Materiality Scrape](https://velawood.com/m-a-glossary-term/double-materiality-scrape/) - A Double Materiality Scrape is a clause in a purchase agreement that states that when determining (a) whether any given representation or warranty in a purchase agreement is accurate or inaccurate (a breach of the representation or warranty), or (b) the amount of losses resulting from a breach of the representation or warranty, any “materiality” or Material Adverse Effect (“MAE”)
- [Dividend](https://velawood.com/m-a-glossary-term/dividend/) - A Dividend is a payment made by a corporation to its stockholders. Dividends can be paid in cash or stock. Startups rarely, if ever, pay dividends.
- [Distribution](https://velawood.com/m-a-glossary-term/distribution/) - Distribution is a payment by a company to its shareholders (or members in the context of an LLC).
- [Disclosure Schedules](https://velawood.com/m-a-glossary-term/disclosure-schedules/) - The Disclosure Schedules are a collection of fact-specific disclosures such as lists of assets, and exceptions to specific statements related to the seller's representations and warranties in a purchase agreement. Disclosure Schedules may be used for a variety of purchase agreements, including purchases of assets, stock, mergers, investments in companies, real estate sales, or other
- [Directors and Officers' (D&O) Insurance](https://velawood.com/m-a-glossary-term/directors-and-officers-do-insurance/) - Directors and Officers' (D&O) Insurance is insurance purchased by a company to protect its directors and officers from claims arising out of company activities or to indemnify them for such claims.
- [Director](https://velawood.com/m-a-glossary-term/director/) - A Director is an elected or appointed person who sits on the board of directors and helps the corporation to make certain decisions. Typically the board of directors is responsible for setting the strategic direction of a company.
- [Default](https://velawood.com/m-a-glossary-term/default/) - Default is when a company is unable to perform the obligations it agreed to in a loan agreement. Which failures by the company constitute default and which rights creditors have upon default vary from agreement to agreement. Often, default is failure to make payments on a loan.
- [Data Room](https://velawood.com/m-a-glossary-term/data-room/) - A Data Room is an online repository of company docs. Typically, a startup will create a data room of relevant company documents to share with potential investors. This is preferred to emailing out docs because the startup can keep them all in one place and update them as necessary. The company can also password protect
- [Corporate Resolution](https://velawood.com/m-a-glossary-term/corporate-resolution/) - A Corporate Resolution is a document that sets forth the actions of a corporation's board or shareholders. In the context of an LLC, it may simply be called a "resolution." A certain level of consent is required for a resolution to be approved.
- [Corporate Governance](https://velawood.com/m-a-glossary-term/corporate-governance/) - Corporate Governance is the manner in which an entity is governed and regulated. The term is used across all entity types - corporations, LLCs, and partnerships. Corporate governance documents include the certificate of formation/incorporation and bylaws for a corporation, and the certificate of formation and company agreement (or operating agreement) for an LLC.
- [Convertible Note](https://velawood.com/m-a-glossary-term/convertible-note/) - A Convertible Note is short-term debt that converts into equity, typically in conjunction with a financing round. By using a convertible note, the investor would be loaning money to a startup, and instead of a return in the form of principal with interest, the investor would receive equity in the startup.
- [Constructive Knowledge](https://velawood.com/m-a-glossary-term/constructive-knowledge/) - Constructive knowledge is knowledge that an individual should have know by virtue of his/her/its position in a Company and/or after due inquiry of others in the Company. Constructive knowledge is a definition of knowledge frequently used in an Asset Purchase Agreement or Stock Purchase Agreement in relation to the Seller.
- [Company Record Book](https://velawood.com/m-a-glossary-term/company-record-book/) - A Company Record Book is also called a "Corporate Record Book". Simply, it is a book that houses your important company documents. In the old days, companies kept a three-ring binder with this important information. Today, it's common to house this information electronically. It's imperative to keep your corporate records in one place to share
- [Company Agreement](https://velawood.com/m-a-glossary-term/company-agreement/) - A Company Agreement is an internal document for an LLC that provides the framework for how a limited liability company operates. According to the TBOC, "It governs the relations among members, managers, and officers of the company, assignees of membership interests in the company, and the company itself; and other internal affairs of the company."
- [Common Stock](https://velawood.com/m-a-glossary-term/common-stock/) - Common Stock is an equity ownership in a company. Common stock is typically issued before any other type of equity. Once a company has raised capital, common stock typically has junior liquidation and distribution rights to other stockholders and creditors.
- [Closing Documents](https://velawood.com/m-a-glossary-term/closing-documents/) - The Closing Documents are documents such as assignments, bills of sale, Treasury certificates, officer certificates, closing statement, funds flow statement, bring down certificates, and similar documentation signed at closing by the parties. These documents assist in transferring assets, confirming closing funding of the purchase price, and other key closing tasks.
- [Collateral](https://velawood.com/m-a-glossary-term/collateral/) - Collateral is a debtor's asset that the debtor allows a creditor to have rights to until the debtor's obligations are satisfied. A company can grant collateral in any of its assets, but most often collateral is granted in inventory or equipment.
- [Closing Date](https://velawood.com/m-a-glossary-term/closing-date/) - The Closing Date is the official closing date of a transaction. Typically the date when the first payment is made by the Buyer/Purchaser, and most (or all) of the assets or ownership of the Seller are transferred.
- [Closing](https://velawood.com/m-a-glossary-term/closing/) - A Closing is the date, sometimes specific time, and process by which a transaction will be completed.
- [Churn Rate](https://velawood.com/m-a-glossary-term/churn-rate/) - Churn Rate is the loss of future revenue due to the loss of a customer/subscription. There are two types of churn: Gross Churn and Net Revenue Churn. Gross Churn: MRR lost in a given month/MRR at the beginning of the month Net Churn: (MRR lost minus MRR from upsells) in a given month/MRR at the
- [Chief Executive Officer (CEO)](https://velawood.com/m-a-glossary-term/chief-executive-officer-ceo/) - The Chief Executive Officer (CEO) is typically the head-honcho of the company. In the context of a startup, "president" and "CEO" are usually synonymous.
- [Change in Control](https://velawood.com/m-a-glossary-term/change-in-control/) - A Change in Control (or Change of Control) transaction is one whereby the owners of a company prior to a transaction no longer own a majority of the shares after the transaction.
- [Certificate of Incorporation (COI)](https://velawood.com/m-a-glossary-term/certificate-of-incorporation-coi/) - A Certificate of Incorporation is a state filing that creates a corporation once filed with the secretary of state. The filing informs the secretary of state about the name the company plans to operate under, whom the state can serve process on (the registered agent), where to mail important documents, and equity classification information.
- [Certificate of Formation (COF)](https://velawood.com/m-a-glossary-term/certificate-of-formation-cof/) - A Certificate of Formation is a legal document that is filed in Texas with the secretary of state to create a corporation, limited liability company, and similar entities. Certificates of formation will contain the entity's basic information (name, registered agent, office address, share structure, etc.). This is known as a Certificate of Incorporation in Delaware.
- [Capitalization Table (Cap Table)](https://velawood.com/m-a-glossary-term/capitalization-table-cap-table/) - A Capitalization Table or Cap Table is a record of the owners of a company and their ownership percentage of the securities issued by the company. It is typically presented in a spreadsheet.
- [Capital Stock](https://velawood.com/m-a-glossary-term/capital-stock/) - Capital Stock is the shares of stock of a corporation, usually in multiple different classes.
- [Capital Gains](https://velawood.com/m-a-glossary-term/capital-gains/) - Capital Gains is the profit from the sale of an asset or property. Taxes on capital gains are typically much lower than taxes on ordinary income.
- [Capital Account](https://velawood.com/m-a-glossary-term/capital-account/) - A Capital Account is a ledger in an LLC which tracks the contributions and distributions to members. Each member's capital account is oftentimes adjusted by allocations and distributions of the company's profits and losses.
- [C-Corporation (C-Corp)](https://velawood.com/m-a-glossary-term/c-corporation-c-corp/) - A C-Corporation is a legal entity that allows for limited liability. C-Corporations are legally considered separate entities from their owners. Income is taxed at the corporate level and is taxed again when it is distributed to owners, potentially resulting in double taxation. Despite the double taxation, C-Corporations are the preferred entity for a startup because
- [Bylaws](https://velawood.com/m-a-glossary-term/bylaws/) - The Bylaws of a corporation set forth the rules for governing corporate matters.
- [Buyout](https://velawood.com/m-a-glossary-term/buyout/) - A Buyout is a takeover action by an outside investor. The investor purchases a controlling interest in the company, "buying out" the current ownership.
- [Business Plan](https://velawood.com/m-a-glossary-term/business-plan/) - A Business Plan is a long document developed by a startup which lays out the blueprint for the startup - including the revenue model, growth plans, market information, and other relevant data. Business plans are not typically requested by investors, but the process of creating one can be useful.
- [Burn Rate](https://velawood.com/m-a-glossary-term/burn-rate/) - Burn Rate is calculated as monthly revenues less expenses. It is typically negative because expenses are so high for a startup relative to revenues. Burn rates are helpful in measuring how quickly a startup will go through all of its cash.
- [Bring Down Certificate](https://velawood.com/m-a-glossary-term/bring-down-certificate/) - A Bring Down Certificate is a signed certificate certifying the company's Representation and Warranties are still true as of the date of the certificate. Bring Down Certificates are often used to certify that the representations and warranties made in an agreement are still true at a later closing date.
- [Book Value](https://velawood.com/m-a-glossary-term/book-value/) - Book Value is the total assets minus the total liabilities of a company. The book value of an asset, as shown on a balance sheet, is typically based on its original cost minus accumulated depreciation. The book value is used for both accounting and tax purposes.
- [At-Will Employee](https://velawood.com/m-a-glossary-term/at-will-employee/) - An At-Will Employee is an employee whose employment with the Company can be terminated by the company or the employee for any reason.
- [Boilerplate](https://velawood.com/m-a-glossary-term/boilerplate/) - Boilerplate is a standard provision that appears in every legal document and effectively means the same thing in every document. The provision may be worded differently, but the provision achieves the same result.
- [Board Consent](https://velawood.com/m-a-glossary-term/board-consent/) - Board Consent is the consent to some company action by the board of directors for actions or transactions that need director approval. Board consent can be effected at a meeting or in writing.
- [Blue Sky Laws](https://velawood.com/m-a-glossary-term/blue-sky-laws/) - Blue Sky Laws are securities restrictions enacted at the state level, established to protect a state's investors. These regulations prohibit brokers and investment advisors from recommending, soliciting, or discussing any security with a client unless that security is compliant with the Blue Sky laws of the state that the investor resides in. With startups, the
- [Bill of Sale](https://velawood.com/m-a-glossary-term/bill-of-sale/) - A Bill of Sale an agreement used to transfer physical assets such as equipment, inventory, office supplies, or similar.
- [Balance Sheet](https://velawood.com/m-a-glossary-term/balance-sheet/) - A Balance Sheet is one of the four main financial statements that provides a summary of a company's finances at a specific point in time. All balance sheets include a company's assets, liabilities, and equity. Unlike other financial statements, the balance sheet provides an accurate summary only at the time it is created.
- [Assignment and Assumption Agreement](https://velawood.com/m-a-glossary-term/assignment-and-assumption-agreement/) - An Assignment and Assumption Agreement is an agreement between two parties, the assignor and assignee where the assignor is assigning his/her/its rights under an agreement or obligation to a third-party, the assignee, and the assignee is assuming the obligations under the agreement or obligation.
- [Assets](https://velawood.com/m-a-glossary-term/assets/) - Assets are physical property, intellectual property, inventory, and other property (whether physical or intangible) of a company.
- [Asset Purchase Agreement](https://velawood.com/m-a-glossary-term/asset-purchase-agreement/) - The main definitive agreement when an acquisition will be a sale of assets of the target company.
- [Asset Acquisition](https://velawood.com/m-a-glossary-term/asset-acquisition/) - An Asset Acquisition is a transaction whereby an acquirer purchases the assets of the company, rather than the ownership interests.
- [Articles of Incorporation (AOI)](https://velawood.com/m-a-glossary-term/articles-of-incorporation-aoi/) - Articles of Incorporation (AOI) are what some states, including California, call the primary organization document for a corporation. In Texas, it's called a "Certificate of Formation" and in Delaware it's called a "Certificate of Incorporation." Many people just refer to these docs as a corporation's charter.
- [Annual Recurring Revenue (ARR)](https://velawood.com/m-a-glossary-term/annual-recurring-revenue-arr/) - Annual Recurring Revenue (ARR) is the amount of revenue a company generates from recurring payments over a year.
- [Allocation Schedule](https://velawood.com/m-a-glossary-term/allocation-schedule/) - An Allocation Schedule is a schedule or attachment, typically to an Asset Purchase Agreement, that separates the purchase price among the assets being purchased in accordance with their general value. The Allocation Schedule is broken up into seven categories of assets and the non-compete, matching the Form 8594 that each party will file with their
- [Actual Knowledge](https://velawood.com/m-a-glossary-term/actual-knowledge-2/) - Actual knowledge is the knowledge that an individual person has in his/her brain. If an entity is involved, Actual Knowledge means the knowledge in the brains of the officers, directors, or other persons designated in the agreement as relevant for purposes of determining the knowledge of a company. Actual Knowledge does not require the individual
- [Advisory Board](https://velawood.com/m-a-glossary-term/advisory-board/) - An Advisory Board is less formal than a startup's board of directors. An advisory board typically consists of people whose experience, knowledge, and influence can benefit the growth and direction of the startup.
- [Accredited Investor](https://velawood.com/m-a-glossary-term/accredited-investor/) - Accredited Investor is defined under the Securities Act of 1933. Anyone (individual or entity) who meets the definition is able to invest in certain private offerings. Simply put, an accredited investor is an individual with a net worth (individually or with a spouse) of at least $1,000,000 exclusive of a primary residence, or who has
- [Acceleration Clause](https://velawood.com/m-a-glossary-term/acceleration-clause/) - An Acceleration Clause refers to a contractual clause which allows debt owed over time to be "accelerated" so that it is owed immediately. You see this most often in promissory notes, where a default or breach of a provision of the agreement will cause the entire debt obligation to accelerate and become due immediately.
- [Accelerated Vesting](https://velawood.com/m-a-glossary-term/accelerated-vesting/) - Accelerated Vesting is a process whereby a holder of restricted equity has the vesting schedule sped-up, or accelerated, upon the occurrence of a certain event or events, i.e. termination of the holder without cause or a sale of the company.
- [409A Valuation](https://velawood.com/m-a-glossary-term/409a-valuation/) - Section 409A of the Internal Revenue Code regulates the treatment of non-qualified deferred compensation to service providers for federal income tax purposes. A company must issue stock options at fair market value in order to legitimately benefit from this section of the code and will typically hire a third-party agency to issue a report determining
- [83(b) Election](https://velawood.com/m-a-glossary-term/83b-election/) - An 83(b) Election is an election made under the Internal Revenue Code that allows a person receiving shares (or units) under a vesting schedule to recognize income based on the entire value of the shares as of the date of the grant - instead of as the shares vest. Basically, you accelerate the ordinary income
- [Related Party](https://velawood.com/m-a-glossary-term/related-party/) - A Related Party means an individual or business that is closely "related" to a specified person or entity. Related Persons are usually relevant for securities purposes and contracts between the related person and a company being acquired.
- [Valuation](https://velawood.com/m-a-glossary-term/valuation/) - Valuation is the process of determining a company's worth. Valuations can be determined as multiplies of the company's metrics or comparisons to other companies that recently valued at certain amounts.
- [UCC Financing Statement](https://velawood.com/m-a-glossary-term/ucc-financing-statement/) - A UCC Financing Statement is a legal form that creditors file to provide notice of their interest (current or future) in the personal property of debtors. It specifically details about the pledged collateral, the terms of the loan, and whether the loan is secured or unsecured. You may also see this called a "UCC-1" or
- [Trade Secret](https://velawood.com/m-a-glossary-term/trade-secret/) - A Trade Secret is any confidential business information which provides a competitive advantage. Trade secrets are often protected by contract law but are also protected by federal and state statutes. Examples of trade secrets include sales methods, distribution methods, advertising strategies, client lists, and formulas.
- [Texas Business Organizations Code (TBOC)](https://velawood.com/m-a-glossary-term/texas-business-organizations-code-tboc/) - The Texas Business Organizations Code (TBOC) codifies the statutes that govern for-profit and non-profit entities in Texas.
- [Stockholders' Consent](https://velawood.com/m-a-glossary-term/stockholders-consent/) - Stockholders' Consent is when some corporate actions such as the sale of the company require the stockholders to consent to the company taking such action.
- [Stockholder](https://velawood.com/m-a-glossary-term/stockholder/) - A Stockholder is the same thing as a "shareholder," or the owner of stock (a.k.a shares) of a corporation. Stockholders can be individuals or entities.
- [Stock Split](https://velawood.com/m-a-glossary-term/stock-split/) - A Stock Split is when a company divides its shares into additional shares. The total value of the shares remains the same, but each shareholder will own two or three times more shares.
- [Stock Power](https://velawood.com/m-a-glossary-term/stock-power/) - A Stock Power is an instrument signed by a transferor and transferee of stock or membership interests in order to effectuate and reflect a transfer of stock or membership interests.
- [Statute of Limitations](https://velawood.com/m-a-glossary-term/statute-of-limitations/) - The Statute of Limitations is the length of time in a given jurisdiction during which a type of legal claim may be brought.
- [Slack](https://velawood.com/m-a-glossary-term/slack/) - Slack is the go-to communications tool for startups. We highly recommend it.
- [Signing Date](https://velawood.com/m-a-glossary-term/signing-date/) - The Signing Date is the date a contract or document is signed by the parties, which may be different than the effective date of a transaction.
- [Secondary Shares](https://velawood.com/m-a-glossary-term/secondary-shares/) - Secondary Shares are shares sold by a shareholder to a third party rather than shares sold by a corporation.
- [Secondary Sale](https://velawood.com/m-a-glossary-term/secondary-sale/) - A Secondary Sale is a sale where a buyer purchases shares of a startup directly from the startup's existing shareholders. This type of transaction allows founders and early-stage investors to take some money off the table.
- [Sarbanes-Oxley Act](https://velawood.com/m-a-glossary-term/sarbanes-oxley-act/) - The Sarbanes-Oxley Act was passed in 2002, largely in response to a number of significant corporate scandals, including Enron and WorldCom. The Act works to protect investors from fraudulent accounting activities and other problematic practices by corporations. You'll also hear it called "SOX" or "Sarbox."
- [Redline](https://velawood.com/m-a-glossary-term/redline/) - A Redline is a document which has been marked up with comments or modifications and has been "redlined" so that the other party can easily identify the changes.
- [Real Property](https://velawood.com/m-a-glossary-term/real-property/) - Real Property is land.
- [Prepayment](https://velawood.com/m-a-glossary-term/prepayment/) - Prepayment is the payment in full of an obligation before the maturity date of the obligation.
- [Newco](https://velawood.com/m-a-glossary-term/newco/) - Newco is a name given to a hypothetical company for ease of description before the company actually has a name. Well, other than the few companies actually named Newco. Yes. They exist. We checked.
- [Joint Venture](https://velawood.com/m-a-glossary-term/joint-venture/) - A Joint Venture is an agreement between two or more parties where they agree to contribute assets, resources, or services toward a particular goal or project.
- [Joinder Page](https://velawood.com/m-a-glossary-term/joinder-page/) - A Joinder Page is a signature page executed and joined to an agreement that was previously executed. The person executing the joinder page becomes bound by the agreement.
- [Issue Price](https://velawood.com/m-a-glossary-term/issue-price/) - The Issue Price is the price at which a company's securities are sold.
- [Foreign Corrupt Practices Act (FCPA)](https://velawood.com/m-a-glossary-term/foreign-corrupt-practices-act-fcpa/) - The Foreign Corrupt Practices Act (FCPA) makes it unlawful for U.S. companies and individuals to offer anything of value to foreign officials in order to build or retain business.
- [Employer Identification Number (EIN)](https://velawood.com/m-a-glossary-term/employer-identification-number-ein/) - An Employer Identification Number (EIN) is the number issued by the IRS to a company that identifies the company as a taxpayer in the US. An EIN is required for a company to open up a bank account and file taxes.
- [Earnout](https://velawood.com/m-a-glossary-term/earnout/) - An Earnout is a portion of a sale agreement whereby the sellers receive certain payments contingent on future events, typically revenue or profit milestones.
- [Division (of a Company)](https://velawood.com/m-a-glossary-term/division-of-a-company/) - A Division of a company is a department, area group, or other portion of the company that sells particular products and services, or supports a particular industry. A Division of a Company, rather than the entire company, may be sold during an acquisition transaction.
- [Delaware General Corporation Law (DGCL)](https://velawood.com/m-a-glossary-term/delaware-general-corporation-law-dgcl/) - DGCL is Delaware General Corporation Law. These statutes govern corporate law (including LLCs) in Delaware.
- [Date of Issue](https://velawood.com/m-a-glossary-term/date-of-issue/) - The Date of Issue is the date that the securities (shares or units) are issued to an investor.
- [Consideration](https://velawood.com/m-a-glossary-term/consideration/) - Consideration is the benefit that both parties get in a contract. In order for a contract to be binding, there must be consideration on both sides. Consideration can be something you will do, or something you will not do.
- [Carveout](https://velawood.com/m-a-glossary-term/carveout/) - A Carveout is an exception from a stated provision in a contract.
- [Buy-Sell Agreement](https://velawood.com/m-a-glossary-term/buy-sell-agreement/) - A Buy-Sell Agreement is an agreement between co-owners that governs the purchase of one party's entire ownership share in a business. A buy-sell is typically used in a 50/50 ownership situation as a mechanism to avoid the dreaded deadlock.
- [Broker-Dealer](https://velawood.com/m-a-glossary-term/broker-dealer/) - A Broker-Dealer is an individual or firm that buys and sells securities or acts as an intermediary for such sales.
- [Break-up Fee](https://velawood.com/m-a-glossary-term/break-up-fee/) - A Break-up Fee is a penalty paid by a potential acquirer to a startup if the potential acquirer backs out of an acquisition. In rare instances, this can also apply in financing rounds.
- [Board of Directors](https://velawood.com/m-a-glossary-term/board-of-directors/) - A Board of Directors is a group of people from outside or inside the company who are elected by shareholders to make long-term, strategic, and broad company policy decisions. Boards can be almost any size, but the most effective boards in startups are often 3-5 people.
- [As-Converted Basis](https://velawood.com/m-a-glossary-term/as-converted-basis/) - As-Converted Basis refers to the calculation of securities assuming conversion of all stock.
- [Section 368(a)(1) Reorganizations(or Tax Free Reorganization)](https://velawood.com/m-a-glossary-term/section-368a1-reorganizationsor-tax-free-reorganization/) - A set of statutory ways in which a corporation may reorganize or structure a restructuring without the transaction being taxable at the time of the transaction. Section 368(a)(1) reorganizations are sometimes used for acquisitions, restructuring, or mergers of companies.

## Founder Forms

- [Advisor Agreement](https://velawood.com/founder-form/advisor-agreement/) - Who this is for? Suspendisse vestibulum arcu per molestie purus laoreet fringilla id sed gravida a malesuada consequat consectetur dis leo suspendisse vivamus arcu eu parturient parturient placerat a. At scelerisque commodo hac vestibulum leo fringilla ornare mus donec luctus leo dis sit nisl. How to use this form A curae hac euismod est parturient

## Signals Graphics

- [Revesting for Founders - Vesting Duration](https://velawood.com/signals_graphic/revesting-for-founders-vesting-duration/) - Revesting frequently enters the conversation when new capital comes into a company—particularly in connection with priced rounds. Investors may ask founders to extend or restart vesting to realign incentives and reduce retention risk. What’s “market” on duration? Here's what we found in a survey of our recent early-stage deals: • 81% of founders revest over
- [Trends in Financing Document Sets at Seed](https://velawood.com/signals_graphic/trends-in-financing-document-sets-at-seed/) - What financing documents are companies preferring for initial priced rounds? The NVCA model documents provide well-established, comprehensive investor protections and remain the standard for many financings. The growing adoption of SeriesSeed.com forms reflects a shift toward streamlined documentation that supports faster closings and lower upfront costs, while preserving flexibility to address additional terms and protections
- [Equity Vesting Playbook - Advisors](https://velawood.com/signals_graphic/equity-vesting-playbook-advisors/) - Advisors play a valuable role in supporting startups by providing strategic guidance, industry expertise, and critical connections. In exchange for their services, startups often grant non-qualified stock options (NQSOs). Below, we highlight four key vesting terms: • Vesting Duration: How long until the options are 100% vested • Cliff vs. No Cliff: Percentage of options
- [Revesting for Founders - Percentage of Shares](https://velawood.com/signals_graphic/revesting-for-founders-percentage-of-shares/) - Revesting frequently enters the conversation when new capital comes into a company—particularly in connection with priced rounds. Investors may ask founders to revest all or a portion of their vested shares to realign incentives and reduce retention risk. What’s “market” on the number of shares subject to revesting? Here's what we found in a survey
- [Vesting Schedules by Role - How Long is Standard?](https://velawood.com/signals_graphic/vesting-schedules-by-role-how-long-is-standard/) - Vesting aligns incentives between the company and its stakeholders. Without it, startups risk compensating short-term involvement, which can lead to misalignment, unintended dilution and a potential hurdle to future funding. By structuring vesting schedules thoughtfully, founders can ensure equity is earned, not just granted, and that those holding it remain motivated to see the company
- [New Investor Terms Superior > Convertibles](https://velawood.com/signals_graphic/new-investor-terms-superior-convertibles/) - How often do SAFEs and Notes convert into less favorable shares than those issued to new investors? In a review of our last 50 equity rounds involving SAFEs and convertible notes, we found that in over 14% of financings, convertible holders received materially inferior terms relative to new money investors: 10.3% of rounds involved conversion
- [Participation Rights Are Increasing Post-2022](https://velawood.com/signals_graphic/participation-rights-increasing/) - In addition to decreased valuations and less capital being deployed, what other market signals are forming? We looked at our last 50 deals among companies with multiple equity financings and compared them to the height of the venture market in 2021-2022. We found that investors are negotiating for participation rights far more frequently – increasing

## Categories

- [Uncategorized](https://velawood.com/category/uncategorized/)
- [Employment](https://velawood.com/category/employment/)
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- [Crowdfunding](https://velawood.com/category/funding-capital-raising/crowdfunding/)
- [Intellectual Property](https://velawood.com/category/intellectual-property/)
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- [The Company Agreement Explained](https://velawood.com/category/corporate-governance/company-agreement/)
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- [Artificial Intelligence](https://velawood.com/category/artificial-intelligence/)
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## Tags

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- [virtual](https://velawood.com/tag/virtual/)
- [property rights](https://velawood.com/tag/property-rights/)
- [virtual rights](https://velawood.com/tag/virtual-rights/)
- [camera](https://velawood.com/tag/camera/)
- [app](https://velawood.com/tag/app/)
- [permission](https://velawood.com/tag/permission/)
- [property owner](https://velawood.com/tag/property-owner/)
- [data](https://velawood.com/tag/data/)
- [free speech](https://velawood.com/tag/free-speech/)
- [infringe](https://velawood.com/tag/infringe/)
- [airspace](https://velawood.com/tag/airspace/)
- [technology](https://velawood.com/tag/technology/)
- [landowner](https://velawood.com/tag/landowner/)
- [Niantic](https://velawood.com/tag/niantic/)
- [private offering exemptions](https://velawood.com/tag/private-offering-exemptions/)
- [private offerings](https://velawood.com/tag/private-offerings/)
- [Reg D](https://velawood.com/tag/reg-d/)
- [Reg D exemptions](https://velawood.com/tag/reg-d-exemptions/)
- [small businesses](https://velawood.com/tag/small-businesses/)
- [DFW startups](https://velawood.com/tag/dfw-startups/)
- [Texas startups](https://velawood.com/tag/texas-startups/)
- [startup attorneys](https://velawood.com/tag/startup-attorneys/)
- [pitch](https://velawood.com/tag/pitch/)
- [pitch deck](https://velawood.com/tag/pitch-deck/)
- [pitch deck outline](https://velawood.com/tag/pitch-deck-outline/)
- [pitch deck template](https://velawood.com/tag/pitch-deck-template/)
- [pitch deck presentation](https://velawood.com/tag/pitch-deck-presentation/)
- [startup pitch](https://velawood.com/tag/startup-pitch/)
- [startup pitch tips](https://velawood.com/tag/startup-pitch-tips/)
- [pitch deck example](https://velawood.com/tag/pitch-deck-example/)
- [problem](https://velawood.com/tag/problem/)
- [solution](https://velawood.com/tag/solution/)
- [service](https://velawood.com/tag/service/)
- [competitive analysis](https://velawood.com/tag/competitive-analysis/)
- [revenue model](https://velawood.com/tag/revenue-model/)
- [financial projections](https://velawood.com/tag/financial-projections/)
- [pitch deck resource](https://velawood.com/tag/pitch-deck-resource/)
- [VC](https://velawood.com/tag/vc/)
- [venture capitalist](https://velawood.com/tag/venture-capitalist/)
- [new york](https://velawood.com/tag/new-york/)
- [register](https://velawood.com/tag/register/)
- [state](https://velawood.com/tag/state/)
- [permit](https://velawood.com/tag/permit/)
- [process](https://velawood.com/tag/process/)
- [information](https://velawood.com/tag/information/)
- [requirements](https://velawood.com/tag/requirements/)
- [work culture](https://velawood.com/tag/work-culture/)
- [strategy](https://velawood.com/tag/strategy/)
- [legislature](https://velawood.com/tag/legislature/)
- [Subchapter R](https://velawood.com/tag/subchapter-r/)
- [void](https://velawood.com/tag/void/)
- [corporate acts](https://velawood.com/tag/corporate-acts/)
- [issuances](https://velawood.com/tag/issuances/)
- [authorize](https://velawood.com/tag/authorize/)
- [Texas Business Organizations Code](https://velawood.com/tag/texas-business-organizations-code/)
- [Delaware General Corporation Law](https://velawood.com/tag/delaware-general-corporation-law/)
- [governing documents](https://velawood.com/tag/governing-documents/)
- [amendment](https://velawood.com/tag/amendment/)
- [shareholder](https://velawood.com/tag/shareholder/)
- [voidable](https://velawood.com/tag/voidable/)
- [putative](https://velawood.com/tag/putative/)
- [founders](https://velawood.com/tag/founders/)
- [company shares](https://velawood.com/tag/company-shares/)
- [certificate](https://velawood.com/tag/certificate/)
- [ownership](https://velawood.com/tag/ownership/)
- [voting](https://velawood.com/tag/voting/)
- [ratification](https://velawood.com/tag/ratification/)
- [governance](https://velawood.com/tag/governance/)
- [entity formation](https://velawood.com/tag/entity-formation/)
- [friends and family round](https://velawood.com/tag/friends-and-family-round/)
- [entrepreneur](https://velawood.com/tag/entrepreneur/)
- [potential investor](https://velawood.com/tag/potential-investor/)
- [no](https://velawood.com/tag/no/)
- [rejection](https://velawood.com/tag/rejection/)
- [positive](https://velawood.com/tag/positive/)
- [money](https://velawood.com/tag/money/)
- [plan](https://velawood.com/tag/plan/)
- [business model](https://velawood.com/tag/business-model/)
- [raising money](https://velawood.com/tag/raising-money/)
- [business judgment](https://velawood.com/tag/business-judgment/)
- [business judgment rule](https://velawood.com/tag/business-judgment-rule/)
- [poor business judgment](https://velawood.com/tag/poor-business-judgment/)
- [judgment](https://velawood.com/tag/judgment/)
- [company mismanagement](https://velawood.com/tag/company-mismanagement/)
- [mismanagement](https://velawood.com/tag/mismanagement/)
- [directors](https://velawood.com/tag/directors/)
- [officers](https://velawood.com/tag/officers/)
- [executives](https://velawood.com/tag/executives/)
- [allegation](https://velawood.com/tag/allegation/)
- [plaintiff](https://velawood.com/tag/plaintiff/)
- [poor judgment](https://velawood.com/tag/poor-judgment/)
- [company executive](https://velawood.com/tag/company-executive/)
- [fiduciary duties](https://velawood.com/tag/fiduciary-duties/)
- [company lawsuit](https://velawood.com/tag/company-lawsuit/)
- [business decision](https://velawood.com/tag/business-decision/)
- [decision](https://velawood.com/tag/decision/)
- [logical](https://velawood.com/tag/logical/)
- [reasonable](https://velawood.com/tag/reasonable/)
- [accountable](https://velawood.com/tag/accountable/)
- [bad decision](https://velawood.com/tag/bad-decision/)
- [personal benefit](https://velawood.com/tag/personal-benefit/)
- [proof](https://velawood.com/tag/proof/)
- [conflict](https://velawood.com/tag/conflict/)
- [conflict of interest](https://velawood.com/tag/conflict-of-interest/)
- [harm](https://velawood.com/tag/harm/)
- [intentionally harm](https://velawood.com/tag/intentionally-harm/)
- [client](https://velawood.com/tag/client/)
- [case](https://velawood.com/tag/case/)
- [fraud](https://velawood.com/tag/fraud/)
- [misappropriation](https://velawood.com/tag/misappropriation/)
- [tort](https://velawood.com/tag/tort/)
- [tortious](https://velawood.com/tag/tortious/)
- [wrong](https://velawood.com/tag/wrong/)
- [evidence](https://velawood.com/tag/evidence/)
- [experts](https://velawood.com/tag/experts/)
- [friends](https://velawood.com/tag/friends/)
- [family](https://velawood.com/tag/family/)
- [securities laws](https://velawood.com/tag/securities-laws/)
- [why securities laws matter](https://velawood.com/tag/why-securities-laws-matter/)
- [SEC](https://velawood.com/tag/sec/)
- [securities and exchange commission](https://velawood.com/tag/securities-and-exchange-commission/)
- [dodd frank](https://velawood.com/tag/dodd-frank/)
- [business community](https://velawood.com/tag/business-community/)
- [tycoons](https://velawood.com/tag/tycoons/)
- [security](https://velawood.com/tag/security/)
- [what is a security](https://velawood.com/tag/what-is-a-security/)
- [sell](https://velawood.com/tag/sell/)
- [debt](https://velawood.com/tag/debt/)
- [bond](https://velawood.com/tag/bond/)
- [investment contracts](https://velawood.com/tag/investment-contracts/)
- [contract](https://velawood.com/tag/contract/)
- [rule](https://velawood.com/tag/rule/)
- [exemption](https://velawood.com/tag/exemption/)
- [price](https://velawood.com/tag/price/)
- [regulation](https://velawood.com/tag/regulation/)
- [regulate](https://velawood.com/tag/regulate/)
- [regulators](https://velawood.com/tag/regulators/)
- [amend](https://velawood.com/tag/amend/)
- [capital growth](https://velawood.com/tag/capital-growth/)
- [crowdfunding exemptions](https://velawood.com/tag/crowdfunding-exemptions/)
- [employee](https://velawood.com/tag/employee/)
- [employee benefit plan](https://velawood.com/tag/employee-benefit-plan/)
- [restriction](https://velawood.com/tag/restriction/)
- [file](https://velawood.com/tag/file/)
- [fee](https://velawood.com/tag/fee/)
- [attorney](https://velawood.com/tag/attorney/)
- [lawyer](https://velawood.com/tag/lawyer/)
- [structure](https://velawood.com/tag/structure/)
- [state securities laws](https://velawood.com/tag/state-securities-laws/)
- [federal](https://velawood.com/tag/federal/)
- [government](https://velawood.com/tag/government/)
- [comply](https://velawood.com/tag/comply/)
- [securities straight talk](https://velawood.com/tag/securities-straight-talk/)
- [rule 504](https://velawood.com/tag/rule-504/)
- [ruling](https://velawood.com/tag/ruling/)
- [repeal](https://velawood.com/tag/repeal/)
- [rule 505](https://velawood.com/tag/rule-505/)
- [offering](https://velawood.com/tag/offering/)
- [small offerings](https://velawood.com/tag/small-offerings/)
- [raise money](https://velawood.com/tag/raise-money/)
- [state securities](https://velawood.com/tag/state-securities/)
- [state securities board](https://velawood.com/tag/state-securities-board/)
- [qualify for exemption](https://velawood.com/tag/qualify-for-exemption/)
- [exemptions](https://velawood.com/tag/exemptions/)
- [sale](https://velawood.com/tag/sale/)
- [million](https://velawood.com/tag/million/)
- [limit](https://velawood.com/tag/limit/)
- [accredited](https://velawood.com/tag/accredited/)
- [wealthy](https://velawood.com/tag/wealthy/)
- [disclose](https://velawood.com/tag/disclose/)
- [advertise](https://velawood.com/tag/advertise/)
- [solicitation](https://velawood.com/tag/solicitation/)
- [filing](https://velawood.com/tag/filing/)
- [filing requirement](https://velawood.com/tag/filing-requirement/)
- [exempt](https://velawood.com/tag/exempt/)
- [disclosure](https://velawood.com/tag/disclosure/)
- [financial](https://velawood.com/tag/financial/)
- [financial statement](https://velawood.com/tag/financial-statement/)
- [certified financial statement](https://velawood.com/tag/certified-financial-statement/)
- [rule 147](https://velawood.com/tag/rule-147/)
- [intrastate](https://velawood.com/tag/intrastate/)
- [bad actor](https://velawood.com/tag/bad-actor/)
- [disqualification](https://velawood.com/tag/disqualification/)
- [provision](https://velawood.com/tag/provision/)
- [individual](https://velawood.com/tag/individual/)
- [criminal](https://velawood.com/tag/criminal/)
- [period](https://velawood.com/tag/period/)
- [form d](https://velawood.com/tag/form-d/)
- [uniform offering exemption](https://velawood.com/tag/uniform-offering-exemption/)
- [change](https://velawood.com/tag/change/)
- [restrictions](https://velawood.com/tag/restrictions/)
- [local](https://velawood.com/tag/local/)
- [registration](https://velawood.com/tag/registration/)
- [incorporate](https://velawood.com/tag/incorporate/)
- [interstate](https://velawood.com/tag/interstate/)
- [Delaware](https://velawood.com/tag/delaware/)
- [qualify](https://velawood.com/tag/qualify/)
- [California](https://velawood.com/tag/california/)
- [blue sky law](https://velawood.com/tag/blue-sky-law/)
- [body of law](https://velawood.com/tag/body-of-law/)
- [broker](https://velawood.com/tag/broker/)
- [dealer](https://velawood.com/tag/dealer/)
- [raise](https://velawood.com/tag/raise/)
- [notice](https://velawood.com/tag/notice/)
- [research](https://velawood.com/tag/research/)
- [apply](https://velawood.com/tag/apply/)
- [submit](https://velawood.com/tag/submit/)
- [expense](https://velawood.com/tag/expense/)
- [pay](https://velawood.com/tag/pay/)
- [states](https://velawood.com/tag/states/)
- [blue sky laws](https://velawood.com/tag/blue-sky-laws/)
- [CPA](https://velawood.com/tag/cpa/)
- [accountant](https://velawood.com/tag/accountant/)
- [banker](https://velawood.com/tag/banker/)
- [insurance](https://velawood.com/tag/insurance/)
- [entity](https://velawood.com/tag/entity/)
- [cost](https://velawood.com/tag/cost/)
- [requirement](https://velawood.com/tag/requirement/)
- [delaware franchise tax](https://velawood.com/tag/delaware-franchise-tax/)
- [bill](https://velawood.com/tag/bill/)
- [authorized shares](https://velawood.com/tag/authorized-shares/)
- [taxed](https://velawood.com/tag/taxed/)
- [fund](https://velawood.com/tag/fund/)
- [deal](https://velawood.com/tag/deal/)
- [pitching](https://velawood.com/tag/pitching/)
- [work](https://velawood.com/tag/work/)
- [job](https://velawood.com/tag/job/)
- [work abroad](https://velawood.com/tag/work-abroad/)
- [work remotely](https://velawood.com/tag/work-remotely/)
- [desk independence](https://velawood.com/tag/desk-independence/)
- [travel](https://velawood.com/tag/travel/)
- [millennial](https://velawood.com/tag/millennial/)
- [productivity](https://velawood.com/tag/productivity/)
- [co-working](https://velawood.com/tag/co-working/)
- [personal development](https://velawood.com/tag/personal-development/)
- [job satisfaction](https://velawood.com/tag/job-satisfaction/)
- [Portugal](https://velawood.com/tag/portugal/)
- [corporate governance](https://velawood.com/tag/corporate-governance/)

## Resource Types

- [Podcasts](https://velawood.com/resource_type/podcasts/)
- [Newsletters](https://velawood.com/resource_type/newsletters/)
- [Blogs](https://velawood.com/resource_type/blogs/)
- [Books](https://velawood.com/resource_type/books/)
- [Other Resources](https://velawood.com/resource_type/other-resources/)
- [Pitch Decks](https://velawood.com/resource_type/pitch-decks/)
- [Tools](https://velawood.com/resource_type/tools/)

## Podcast Types

- [Vig & Juice](https://velawood.com/podcast_type/vig-and-juice/)
- [Three Things](https://velawood.com/podcast_type/three-things/)
- [Office Hours](https://velawood.com/podcast_type/office-hours/)
- [Preparing for Funding](https://velawood.com/podcast_type/preparing-for-funding/)
- [Silicon Valley Review](https://velawood.com/podcast_type/silicon-valley-review/)
- [Venture Deals Review](https://velawood.com/podcast_type/venture-deals-review/)
- [Laws of the Game](https://velawood.com/podcast_type/laws-of-the-game/) - Laws of the Game is a Vela Wood podcast discussing the history, operation, and organization of soccer worldwide hosted by Kate Porter and Andrew Visnovsky, our international sports law experts.
- [Sauce Secrets](https://velawood.com/podcast_type/sauce-secrets/)
- [Against the Rules](https://velawood.com/podcast_type/against-the-rules/)

## Series

- [Blockchain Breakfast Summer Series](https://velawood.com/series/blockchain-breakfast-summer-series/)
- [Securities Straight Talk](https://velawood.com/series/securities-straight-talk/)
- [VW Abroad](https://velawood.com/series/vw-abroad/)
- [YLAI Program](https://velawood.com/series/ylai-program/)
- [Russian Exchange](https://velawood.com/series/russian-exchange/)
- [Pitch Americas](https://velawood.com/series/pitch-americas/)
- [Understanding Basic Contracts](https://velawood.com/series/understanding-basic-contracts/)
- [If I Were Starting a Business](https://velawood.com/series/if-i-were-starting-a-business/)
- [Indemnification in Mergers and Acquisitions Contracts](https://velawood.com/series/indemnification-in-mergers-and-acquisitions-contracts/)
- [How to Angel Invest](https://velawood.com/series/how-to-angel-invest/)
- [Venture in the Middle](https://velawood.com/series/venture-in-the-middle/)
- [The Sell Side](https://velawood.com/series/the-sell-side/)

## States

- [California](https://velawood.com/state/california/)
- [Florida](https://velawood.com/state/florida/)
- [Louisiana](https://velawood.com/state/louisiana/)
- [New Mexico](https://velawood.com/state/new-mexico/)
- [New York](https://velawood.com/state/new-york/)
- [South Carolina](https://velawood.com/state/south-carolina/)
- [Texas](https://velawood.com/state/texas/)
- [Minnesota](https://velawood.com/state/minnesota/)
- [Arizona](https://velawood.com/state/arizona/)
- [Colorado](https://velawood.com/state/colorado/)
- [Illinois](https://velawood.com/state/illinois/)
- [Missouri](https://velawood.com/state/missouri/)
- [New Jersey](https://velawood.com/state/new-jersey/)
- [United States Patent Bar](https://velawood.com/state/united-states-patent-bar/)

## Podcast Series

- [Preparing for Funding](https://velawood.com/podcast-series/preparing-for-funding/)
- [Sauce Secrets](https://velawood.com/podcast-series/sauce-secrets/) - Sauce Secrets is a podcast discussing alcohol manufacturers and how they got to where they are now. Each episode, our host VW Partner Clark Smith, interviews a successful and interesting alcohol industry leader.

## Infographic Types

- [Annual Reports](https://velawood.com/infographic_types/annual-report/)
- [VW FWD](https://velawood.com/infographic_types/vw-fwd/)
- [Venture Deals](https://velawood.com/infographic_types/venture-deals/)

## Investors

- [Undisclosed](https://velawood.com/investor/undisclosed/)
- [BFG Sports Bet](https://velawood.com/investor/bfg-sports-bet/)
- [Vivid Seats](https://velawood.com/investor/vivid-seats/)
- [Bally's](https://velawood.com/investor/ballys/)
- [Better Collective](https://velawood.com/investor/better-collective/)
- [Gambling.com](https://velawood.com/investor/gambling-com/)
- [Penn National Gaming](https://velawood.com/investor/penn-national-gaming/)
- [XL Media](https://velawood.com/investor/xl-media/)
- [DraftKings](https://velawood.com/investor/draftkings/)
- [FuboTV](https://velawood.com/investor/fubotv/)
- [Entercom Communications](https://velawood.com/investor/entercom-communications/)
- [Latitude 360](https://velawood.com/investor/latitude-360/)
- [Paddy Power Betfair](https://velawood.com/investor/paddy-power-betfair/)
- [Catena Media](https://velawood.com/investor/catena-media/)
- [Elys Game Technology](https://velawood.com/investor/elys-game-technology/)
- [Bragg Gaming](https://velawood.com/investor/bragg-gaming/)
- [PointsBet](https://velawood.com/investor/pointsbet/)
- [Brookfield Business Partners](https://velawood.com/investor/brookfield-business-partners/)
- [Sands Capital](https://velawood.com/investor/sands-capital/)
- [Cardinal Sports Capital](https://velawood.com/investor/cardinal-sports-capital/)
- [Kaszek](https://velawood.com/investor/kaszek/)
- [Andreessen Horowitz](https://velawood.com/investor/andreessen-horowitz/)
- [KB Partners](https://velawood.com/investor/kb-partners/)
- [Acies Investments](https://velawood.com/investor/acies-investments/)
- [Miniclip](https://velawood.com/investor/miniclip/)
- [New Age Capital](https://velawood.com/investor/new-age-capital/)
- [Connetic Ventures](https://velawood.com/investor/connetic-ventures/)
- [Sharp Alpha Investors](https://velawood.com/investor/sharp-alpha-investors/)
- [Bettor Capital](https://velawood.com/investor/bettor-capital/)
- [Raptor Group](https://velawood.com/investor/raptor-group/)
- [SeventySix Capital](https://velawood.com/investor/seventysix-capital/)
- [HBSE Ventures](https://velawood.com/investor/hbse-ventures/)
- [Verance Capital](https://velawood.com/investor/verance-capital/)
- [Brand Capital International](https://velawood.com/investor/brand-capital-international/)
- [Bill Miller](https://velawood.com/investor/bill-miller/)
- [David Ganek](https://velawood.com/investor/david-ganek/)
- [Marvin Bush](https://velawood.com/investor/marvin-bush/)
- [Anti Fund](https://velawood.com/investor/anti-fund/)
- [Nasdaq Ventures](https://velawood.com/investor/nasdaq-ventures/)
- [Earvin Johnson](https://velawood.com/investor/earvin-johnson/)
- [Elysian Park Ventures](https://velawood.com/investor/elysian-park-ventures/)
- [Mark Walter](https://velawood.com/investor/mark-walter/)
- [TEDCO](https://velawood.com/investor/tedco/)
- [Left Lane Capital](https://velawood.com/investor/left-lane-capital/)
- [Glencrest Global](https://velawood.com/investor/glencrest-global/)
- [Phoenix Capital Ventures](https://velawood.com/investor/phoenix-capital-ventures/)
- [Astralis Capital](https://velawood.com/investor/astralis-capital/)
- [Kevin Carter](https://velawood.com/investor/kevin-carter/)
- [Blackrock](https://velawood.com/investor/blackrock/)
- [Underdog](https://velawood.com/investor/underdog/)
- [Genius Sports Limited](https://velawood.com/investor/genius-sports-limited/)
- [Pantera Capital](https://velawood.com/investor/pantera-capital/)
- [Dream Ventures](https://velawood.com/investor/dream-ventures/)
- [Betsperts Media & Technology Group](https://velawood.com/investor/betsperts-media-technology-group/)
- [Allwyn International AG](https://velawood.com/investor/allwyn-international-ag/)
- [Forerunner](https://velawood.com/investor/forerunner/)
- [Flutter Entertainment](https://velawood.com/investor/flutter-entertainment/)
- [Frontstage Ventures](https://velawood.com/investor/frontstage-ventures/)
- [Spark Capital](https://velawood.com/investor/spark-capital/)
- [SIG Sports Investments (Susquehanna International Group)](https://velawood.com/investor/sig-sports-investments-susquehanna-international-group/)
- [Harmony Partners](https://velawood.com/investor/harmony-partners/)
- [10X Capital](https://velawood.com/investor/10x-capital/)
- [Fliff](https://velawood.com/investor/fliff/)
- [Boston Seed](https://velawood.com/investor/boston-seed/)
- [Lux Capital](https://velawood.com/investor/lux-capital/)
- [IA Sports Ventures / Eberg Capital (Roger Ehrenberg)](https://velawood.com/investor/ia-sports-ventures-eberg-capital-roger-ehrenberg/)
- [Fuel Venture Capital](https://velawood.com/investor/fuel-venture-capital/)
- [Perry Gershon](https://velawood.com/investor/perry-gershon/)
- [Techstars](https://velawood.com/investor/techstars/)
- [Yahoo Sports](https://velawood.com/investor/yahoo-sports/)
- [MIXI, Inc.](https://velawood.com/investor/mixi-inc/)
- [Ninjabet](https://velawood.com/investor/ninjabet/)
- [Chicago Trading Company](https://velawood.com/investor/chicago-trading-company/)

## First letter

- [a](https://velawood.com/glossary/a/)
- [b](https://velawood.com/glossary/b/)
- [c](https://velawood.com/glossary/c/)
- [s](https://velawood.com/glossary/s/)
- [d](https://velawood.com/glossary/d/)
- [e](https://velawood.com/glossary/e/)
- [f](https://velawood.com/glossary/f/)
- [g](https://velawood.com/glossary/g/)
- [h](https://velawood.com/glossary/h/)
- [i](https://velawood.com/glossary/i/)
- [j](https://velawood.com/glossary/j/)
- [k](https://velawood.com/glossary/k/)
- [l](https://velawood.com/glossary/l/)
- [m](https://velawood.com/glossary/m/)
- [n](https://velawood.com/glossary/n/)
- [o](https://velawood.com/glossary/o/)
- [p](https://velawood.com/glossary/p/)
- [r](https://velawood.com/glossary/r/)
- [t](https://velawood.com/glossary/t/)
- [v](https://velawood.com/glossary/v/)
- [w](https://velawood.com/glossary/w/)
- [u](https://velawood.com/glossary/u/)
- [q](https://velawood.com/glossary/q/)
- [#](https://velawood.com/glossary/30/)
- [z](https://velawood.com/glossary/z/)