Glossary

Explore a curated collection of key terms and definitions commonly used in startup investing.

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Advance Assurance SEIS/EIS

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Advance Subscription Agreement (ASA)

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Allotment of Shares

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Alphabet Shares

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Alternative Investment Fund (AIF)

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AML (Anti-Money Laundering)

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Angel Investor

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Anti-Dilution Protection

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ARR (Annual Recurring Revenue)

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Articles of Association

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ASA (Advanced Subscription Agreement)

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ASA Discount

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ASA Long-Stop Date

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Asset Lock (for SITR/VCT Context)

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Bad Leaver

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Basic vs Fully Diluted Ownership

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Beneficial Ownership

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Board Minutes

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Bridge Round

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Burn Rate

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Business Plan (for AA Submission)

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Cap Table (Capitalisation Table)

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Carry (Investor Term)

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Cashless Exercise

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Cliff

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CLN (Convertible Loan Note)

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Closing (Funding Round Completion)

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Companies House

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Conditions Precedent (CPs)

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Confirmation Statement (CS01)

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Connected Person Rules (SEIS/EIS)

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Convertible Instrument

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Convertible Preference Shares

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Corporate Governance

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CSOP (Company Share Option Plan)

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Data Room

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Deferred Shares

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Dilution

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Disclosure Letter

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Discount Rate (ASA/CLN)

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Disqualifying Arrangements (SEIS/EIS)

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Down Round

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Drag-Along Rights

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Dry Powder (Investor Term)

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Due Diligence (Investor and Legal)

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EIS1 Form

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EIS3 Certificate

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EIS (Enterprise Investment Scheme)

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Electronic Signatures

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EMI40 Annual Return

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EMI Option Scheme

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Equity Financing

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Exercise Price (Strike Price)

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Exit Event

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Exit-Only Options

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Fair Market Value (FMV)

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Follow-On Investment

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Founder Shares

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Fully Diluted Cap Table

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Funding Round

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Fundraising Term Sheet

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GDPR (Data Handling for Investors)

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Good Leaver

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Gross Assets Limit (SEIS/EIS)

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Growth Shares

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Growth Shares Hurdle Rate

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Heads of Terms

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HMRC Valuation (EMI)

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HNW (High Net-Worth Investor Certification)

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Hurdle Condition (Options)

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Independent Investor Condition (SEIS/EIS)

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Information Rights

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Instant Investment/Rolling Closes

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Intellectual Property Assignment

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Investor Consent

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Investor Majority

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IRR (Internal Rate of Return)

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Joint Shareholders Agreement

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Knowledge-Intensive Company

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KYC (Know Your Customer)

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Lead Investor

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Leaver Provisions

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Legal Due Diligence

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Liquidation Preference

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Long-Form Subscription Agreement

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Long-Stop Date (ASA/CLN)

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Loss Relief (SEIS/EIS)

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MFN Clause (Most-Favoured Nation)

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Minority Protections

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MOIC (Multiple on Invested Capital)

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Money-At-Risk (Risk-to-Capital Condition)

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MRR (Monthly Recurring Revenue)

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Nominal Value (Par Value)

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Non-Dilution Rights

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Non-Voting Shares

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Notional Shares/Phantom Shares

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Option Agreement

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Option Exercise

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Option Pool

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Option Pool Shuffle