Various types of anti-dilution provisions to protect existing shareholders. Full ratchet anti-dilution protection allows an investor to have their ownership percentage remain the same as it was after the initial investment in case the next funding round is completed at a lower valuation. Weighted average anti-dilution protection considers the weighted average price and size of the funding rounds.
Please see Internal rate of return
The right of an investor to request the company to buy back (redeem) the investor's shares.
An asset-valuation method that assesses the cost of replacing the asset with another of equal value and character.
A repurchase of outstanding securities by a company that wants to reduce the number of shares issued. By cancelling the shares being bought back, the value of the remaining shares increases. Also known as buyback.
A preferential right of a shareholder to buy new shares in the company before a third party.
Please see Investor roles
Please see Financing rounds
A rule of thumb for angel rounds, often employed as a sanity check for valuation ideas. It stipulates that typically around a third of the company equity will go to investors, another third will be held by the founders, and the final third will be reserved for employees (in an option pool).
The amount of time a startup has until it goes runs out of money given its funding situation and assuming that income and expenses stay constant. It is calculated by dividing current cash reserves by the current monthly burn rate.