Glossary
- 409A Valuation
- Alternative Minimum Tax (AMT)
- Angel Investor
- Anti-Dilution Clause
- Bootstrapping
- Burn Rate
- Cashless Exercise
- Cliff
- Common Stock
- Convertible Debt
- Dilution
- Down Round
- Drag-Along Right
- Emerging Growth Company
- Growth Equity
- Cap Table
- Employee Stock Ownership Program (ESOP)
- Exercise Notice
- Fair Market Value
- General Solicitation
- Incentive Stock Option (ISO)
- Term Sheet
- Information Rights
- Initial Public Offering (IPO)
- Investor's Rights Agreement
- Issuer
- Liquidation
- Liquidation Preference
- Liquidity
- Lock-up Period
- Non-Statutory Stock Option
- Pari passu
- Pledge
- Post-money Valuation
- Pre-money Valuation
- Preferred Stock
- Private Placement
- Right of First Refusal (ROFR)
- Rule 506(b)
- Repurchase Option
- JOBS Act
- Secondary Transaction
- Separation Agreement
- Shareholder Limit
- Shareholder of Record
- Stock Plan or Employee Incentive Plan
- Venture Capital
- Vesting
- Unicorn
- Tender Offer
- Seed Round
- Restricted Stock (also known as RSU)
- Transfer Restrictions
- Exit Event or Liquidity Event
- Control Rights
- Ordinary Income Rate
- Management Fee
- Accelerator
- Adverse Change Redemption
- As-converted Basis
- Blended Preferences
- Bridge Loan
- Ratchet
- Pro rata right
- Reverse dilution
- Stacked Preference
- Senior Liquidation Preference
- Alternative Asset Class
- Friends and Family Round
- Golden Handcuffs
- Inside Round
- Party Round
- Due diligence
- Demand rights
- Earnings before interest and taxes (EBIT)
- Elevator pitch
- Fund of funds
- Incubator
- Lead investor
- Limited Partner (LP)
- Gross Margin
- Run Rate
- Pay to play
- Piggyback rights
- Non-disclosure agreement (NDA)
- Shares Outstanding
- Fully Diluted Shares Outstanding
- Revenue Multiple
- Exercise Price (also known as Strike Price)
- Portfolio Company
- Recapitalization
- Redemption Rights
- Return on Investment (ROI)
- Rights of Co-Sale With Founders
- Road Show
- Shareholder Agreement
- Stock Option
- Investment Syndicate
- Tag-Along Right
- Washout Round
- Write-Off
- Lockup period
- Revenue
- Net Revenue
- Revenue Run Rate
- Carried Interest
- Accredited Investor
- Implied Valuation
Implied Valuation
The implied valuation is the value of the company that is implicit in the offering price per share. It is calculated by multiplying the offering price by the Fully Diluted Shares Outstanding. For example, Company A raised a Series E round last year at a $2.0 Bn valuation and they had 100 million Fully Diluted Shares Outstanding (and therefore a share price of $20). If an investor purchases shares at a 20% discount to the last valuation, the implied valuation would be $1.6 Bn ($20 x 80% x 100 M shares).