Intermediate legal
409A Valuation
A 409A is an independent appraisal of a private company's common stock fair market value, required by U.S. tax law before issuing stock options to employees.
#equity
20 results
Glossary
Intermediate equity
Cap Table
A cap table tracks who owns what in a startup - founders, investors, and employees - and how ownership changes across funding rounds.
Intermediate fundraising
Down Round
A down round occurs when a startup raises capital at a lower valuation than its previous round, triggering dilution and anti-dilution.
Intermediate equity
Equity Dilution
Equity dilution occurs when a startup issues new shares, reducing existing shareholders' ownership percentage. It happens at every funding round.
Intermediate equity
ESOP - Employee Stock Option Pool
An ESOP is a reserved pool of equity set aside to grant stock options to employees, advisors, and early hires as non-cash compensation.
Intermediate equity
Good Leaver / Bad Leaver
Good leaver and bad leaver clauses define how a departing employee's unvested and vested equity is treated based on why they left.
Intermediate exits
IPO - Initial Public Offering
An IPO is when a private company first sells shares to the public on a stock exchange, providing liquidity and access to large capital pools.
Intermediate fundraising
Liquidation Preference
The right of preferred investors to be paid back before common shareholders in a liquidation or sale event, protecting downside.
Intermediate fundraising
Pre-Money and Post-Money Valuation
Pre-money valuation is a company's value before investment. Post-money adds the investment amount. Both determine investor ownership.
Intermediate fundraising
Pro-Rata Rights
The right of an investor to participate in future funding rounds to maintain their ownership percentage in the company.
Beginner equity
Stock Options
Stock options give employees the right to buy company shares at a fixed strike price. ISOs and NSOs are the two main types used by startups.
Beginner equity
Vesting Cliff
A vesting cliff is a threshold period - typically one year - before which no equity vests, protecting companies from early team departures.
Beginner equity
Vesting
Equity vesting is how founders and employees earn their shares over time, ensuring long-term alignment between the team and the company's success.
Guides
Intermediate team
10 min How to Build a Compensation Framework
Learn how to create a fair, transparent compensation framework that helps you hire, retain, and build trust across your startup team.
Intermediate equity
12 min How to Negotiate an Equity Offer at a Startup
Understand every component of a startup equity offer - and learn exactly what to negotiate, what to ask, and how to evaluate your upside.
Articles
Intermediate equity
9 min Equity for Early Employees Explained
How to structure stock option grants for early hires - covering grant sizes, vesting, strike prices, and how to communicate equity fairly.
Intermediate fundraising
12 min Startup Exit Strategies Explained
A complete guide to startup exit strategies - how acquisitions, IPOs, and secondaries work, and what founders need to know before planning an exit.
Beginner operations
14 min Startup Legal Basics for Founders
Four legal decisions - incorporation, co-founder equity, IP assignment, and the 83(b) election - can make or break your company. Get them right early.
Beginner fundraising
11 min What Is Venture Capital?
How venture capital works - VC fund structure, what investors look for, fund economics, dilution, and whether VC is the right path for your startup.
Beginner equity
13 min Startup Equity Explained
Equity is ownership - but most founders and employees can't do the math. Here's exactly how startup equity works, dilutes, and pays out.