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Business Transactions

Learn Business Transactions

Written by Jason Gordon

Updated at April 18th, 2022

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 Business Funding - Deal Process

  • Funding Deal Process
  • Series A Funding
  • Standard Equity Financing Documents
    • How to Grant Common Stock
  • Board & Stockholder Approval
  • Due Diligence
  • Stock Purchase Agreement Structure
  • Company Legal Opinion
  • Rolling Closing Date
  • Legal Transaction Costs

Capital Structure

  • Authorized Shares
    • Nominal Value
  • Common and Preferred Shares
    • Non-cumulative (Stock)
    • Guaranteed Stock
  • Preferred Convertible Shares
  • Preferred Liquidation Preference
  • Participating Preferred Shares
  • Participating Convertible Preferred
  • Issued, Outstanding, and Fully Diluted
  • What is Capitalization & How do you Calculate It?
  • What is a Capitalization Table (Cap Table)
  • Options Pools & Capitalization
    • Stock Option
    • Exercise Price or Strike Price
    • Considerations in Exercising a Stock Option
    • 83(b) Election
  • Consideration in Granting Stock or Options
  • Equity Distribution to Founders
  • Issues in Contributing IP for Equity
  • Founders Stock
  • Class F Stock
  • Class FF Stock
  • Stock Vesting Schedule
    • Performance Based Vesting
    • Vesting Schedule & Follow-On Financing
    • Accelerated Vesting
  • Calculate Stock Ownership Percentage
    • Fully Diluted Shares

Business Funding Methods

  • Funding with Company Revenue
  • Personal Contributions of Founders
  • Friends, Family, and Fools
  • Business (Commercial) Loans
  • Promissory Notes
  • Funding from Equity Investments
    • What is a Seed Round?
    • Tax and Securities Law Considerations
  • Initial Coin Offerings- Explained
    • ICO vs Venture Capital Funding
  • Structuring a Seed Round
    • Typical Legal Provisions for a Seed Round
  • Angel Investment & Venture Capital
    • Overview of Angel & VC Investment
    • Angel Investment
      • Friends and Family Round vs Angel Round
      • How to Start an Angel Investment Fund
    • Venture Capital
      • Best Time to Seek VC Funding
      • Pros and Cons of Seeking VC Funding
      • How to Start a Venture Capital Fund
        • Management Company in a VC Fund
        • Venture Capital Exemption from Investment Advisor Act
  • Crowdfunding
  • Debt vs Equity (A Balance)
    • SAFE vs Convertible Note vs Equity Financing
  • Other Financial Methods
  • Business Plan for Loans
  • Business Plan for Equity

Term Sheet Provisions

  • Term Sheet Provisions (Overview)
  • Dividend Rights
  • Liquidation Preference
  • Participation Rights & Caps
  • Liquidation Preference & Follow-on Financing
  • Redemption Rights
  • Conversion Rights
  • Anti-dilution Protection
    • Understanding Anti-dilution
    • Full Ratchet Anti-dilution Protection
    • Weighted-Average Anti-dilution Protection
    • Broad-Based vs Narrow-Based Calculations
  • Carveouts to Anti-Dilution Protections
  • Preemptive Rights
  • Voting Rights
  • Protective Provisions
  • Drag-Along Rights
  • Registration Rights
  • Board Observer Rights & Seats
  • Negative Control Provisions
  • Management Information Rights
  • Special Employee Provisions
  • Counsel & Expenses

Other Concepts


    • Inchoate Definition
    • Counterparty Definition
    • Escalator Clause Definition
    • Abandonment Option (Contract) Definition
    • Remittance Letter Definition

  • Enterprise Investment Scheme vs Seed Enterprise Investment Scheme (England)
  • Overview of Private Equity
  • What Happens to Unvested Stock Options during Acquisition?
  • Venture Capital Exemption from Investment Advisors Act
  • Escrowed Securities Definition
  • Earnout (Sale of Business) Definition
  • Down Round (Finance) Definition
  • Drive-by Deal (Venture Capital) Definition
  • Deal Flow (Finance) Definition
  • De Facto Merger Definition
  • Electronic Data Gathering Analysis and Retrieval (EDGAR) Definition
  • Employee Buyout (EBO) Definition
  • Registration (Securities) Definition
  • Reprice (Stock Options) Definition
  • Rights Offering (Stock Issuance) Definition
  • Redeemable Shares of Stock Definition
  • Registered Investment Advisor Definition
  • Regulation FD Definition
  • Regulated Investment Company Definition
  • Right of First Offer Definition
  • Reverse Takeover (RTO) Definition
  • Rule 144A Securities Regulation Definition
  • National Association of Securities Dealers (NASD) Definition
  • No Shop Clause Definition
  • Carve Out (Finance) Definition
  • Celler-Kefauver Act Definition
  • Central Registration Depository Definition
  • Form 10-K Definition
  • SEC Form S-1 Definition
  • SEC Form S-4 Definition
  • State Securities Laws Blue Sky Laws
  • FTC Act Antitrust Law
  • Best Efforts (IPO Underwriting) Explained
  • Callable Preferred Stock Definition
  • Capitalization Table Definition
  • Collusion Explained
  • Conversion (Financial Asset) Definition
  • Clawback Definition
  • International Securities Identification Number (ISIN) Definition
  • Insider Trading Definition
  • Lead Investor Venture Capital Definition
  • Liquidity Event Definition
  • Liquidation Definition
  • Letter of Intent Definition
  • Leveraged Buyout Definition
  • Option Pool Definition
  • Piggyback Registration Definition
  • Post-Money Valuation Definition
  • Pre-Money and Post-Money Cap Table Definition
  • Private Placement Definition
  • Privitization Definition
  • Price Discrimination Definition
  • Oversubscription Definition
  • Over the Counter Trade Definition
  • Lock Up Period Definition
  • Prospectus Definition
  • Pay to Play Definition
  • Private Company Definition
  • Passive Foreign Investment Company Definition
  • Private Placement Memorandum (PPM) or Offering Memorandum Definition
  • Right of First Refusal Definition
  • Reverse Vesting Definition
  • Redemption Period Definition
  • Seed Capital Definition
  • Regulation S-B Definition
  • Regulation S-K Definition
  • Regulation S-X Definition
  • Reporting Company Definition
  • Subscription Agreement Definition
  • Staying Private Definition
  • Recoupment Definition
  • Realized Pay Definition
  • Regulation S Definition
  • Private Placement Financing Definition
  • Abbrochment Definition
  • Series or Rounds of Financing (Startups) Definition
  • Standard Industrial Classification (SIC) Code Definition
  • Summary Compensation Table Definition
  • Business Development Company Definition
  • Private Investment Company Definition
  • General Solicitation Definition
  • Arms Length Transaction Definition
  • Conversion Ratio Definition
  • Tying Arrangement Definition
  • Syndicate Definition
  • Treasury Stock Definition
  • Unit Offering (Securities) Definition
  • Uniform Securities Act Definition
  • Takedown (Stock Issuance) Definition
  • Up Round Definition
  • Targeted Registered Offering (Greenmail) Definition
  • Tag Along Rights Definition
  • Venture Debt Definition
  • Vesting Schedule Definition
  • World Business Angels Association Definition
  • Backdoor Listing Definition
  • Vesting Definition
  • Crowdfunding Definition
  • Hart Scott Rodino Act Definition
  • Merger Definition
  • Option (Stock) Definition
  • Participating Preferred Stock Definition
  • Tender Offer Definition
  • Term Sheet Definition
  • Private Equity Definition
  • Venture Capital Definition
  • All Holders Rule Definition
  • Business Development Company Definition
  • Blockholder (shareholder) Definition
  • Blind Pool Definition
  • Blank Check Preferred Stock Definition
  • Bullet Dodging Definition
  • Acceleration (Securities Act) Definition
  • Basket Purchase Definition
  • Offering Circular Definition
  • If-Converted Method (Securities) Definition
  • Warrant Coverage Definition
  • Buyout Definition
  • Buyback Definition
  • Buy In Management Buyout (BIMBO) Definition
  • Types of Takeover (Corporate) Definition
  • Undetachable Stock Warrant Definition
  • Underwriter Syndicate Definition
  • Backstop (Securities Issuance) Definition
  • Backstop Purchaser Definition
  • Fair Funds for Investors Definition
  • Laddering Definition
  • Management and Employee Buyout Definition
  • Washout Round Definition
  • Undersubscribed (IPO) Definition
  • Certified Financial Divorce Practitioner Definition
  • Price Fixing Definition
  • Preliminary Prospectus Definition
  • Committed Capital Definition
  • Venture Capital Backed IPO Definition
  • Vertical Merger Definition
  • Master Fund Definition
  • White Knight Definition
  • White Squire Definition
  • Common Stock Equivalent Definition
  • Restricted Stock Definition
  • Restricted Stock Unit Definition
  • Conversion Price Definition
  • Shelf Offering Definition
  • Shelf Registration Definition
  • Short Sale Rule Definition
  • Short-Swing Profit Rule Definition
  • Equity Compensation Definition
  • Subscription Right Definition
  • Straw Buyer Definition
  • Turnaround (Company) Definition
  • Two and Twenty (Compensation) Definition
  • Subscribed (Securities) Definition
  • Roadshow (IPO) Definition
  • Small Company Offering Registration Definition
  • Sophisticated Investor (Securities) Definition
  • Direct Public Offering Definition
  • Disgorgement Definition
  • Distribution Waterfall Definition
  • Share Repurchase Agreement Definition
  • Share Purchase Rights Definition
  • Reverse Triangular Merger Definition
  • Schedule K-1 Definition
  • CINS Number Definition
  • Cash Out Merger Definition
  • Schedule 13D (SEC) Definition
  • Forward Triangular Merger Definition
  • Safe Harbor (Generally) Definition
  • Secondary Offering Definition
  • Accelerated Share Repurchase Definition
  • Accelerated Vesting Definition
  • Friendly Takeover Definition
  • Full Ratchet Definition
  • Tuck-In Acquisition Definition
  • Accumulating Shares Definition
  • Adjustable Rate Preferred Stock Definition
  • Accelerated Resolution Program Definition
  • Academy of Financial Divorce Practitioners Definition
  • Strategic Buyer Definition
  • Classified Shares Definition
  • Exempt Transaction Definition
  • Non-Accredited Investor Definition
  • Notice Filing Definition
  • Sweat Equity Definition
  • Friends and Family Shares Definition
  • Escrow Definition
  • Fully Subscribed Definition
  • Going Private Definition
  • Blank Check Company Definition
  • Phantom Stock Plan Definition
  • Material Insider Information Definition
  • Insider Information Definition
  • Monopolistic Competition Definition
  • Cliff Vesting Definition
  • Mergers and Acquisitions Definition
  • Lock-Up Agreement Definition
  • Intrastate Offering Definition
  • Investment Advisors Act of 1940
  • Corporate Raider Definition
  • Standstill Agreement Definition
  • Misappropriation Theory Definition
  • Bailout (Company) Definition
  • Spinoff Definition
  • Spin Out Definition
  • Stock Appreciation Right Definition
  • Dilutive Acquisition Definition
  • Seasoned Issue Definition
  • Participating Convertible Preferred Stock Definition
  • Institutional Buyout Definition
  • Bid Rigging Definition
  • High Net Worth Individual Definition
  • Indication of Interest Definition
  • Special Purpose Vehicle / Special Purpose Entity Definition
  • Secondary Buyout Definition
  • Regulation SHO Definition
  • Franchise Disclosure Document Definition
  • IPO Lockup Definition
  • Convertible Adjustable Preferred Stock Definition
  • Control Premium Definition
  • Corporate Kleptocracy Definition
  • Carried Interest Definition
  • Break Up Fee Definition
  • Minority IPO Definition
  • Gray Knight (Hostile Takeover) Definition
  • Bought Deal Definition
  • Closed-Market Transaction Definition
  • Bailout Takeover Definition
  • All Cash All Stock Offer Definition
  • People Poison Pill Definition
  • Busted Takeover Definition
  • Pathfinder Prospectus Definition
  • Preferred Equity Redemption Stock Definition
  • Letter of Comment Definition
  • Direct Stock Purchase Plan Definition
  • Bust-Up Takeover Definition
  • Form S-3 Filing Definition
  • Form S-8 Filing Definition
  • Dirks Test Definition
  • Average Cost Pricing Rule Definition
  • Pump and Dump Definition
  • Best Price Rule 14D-10 Definition
  • Amalgamation Definition
  • Corporate Financing Committee Definition
  • Shotgun Clause Definition
  • Employee Stock Ownership Plan Definition
  • Competitive Tender Definition
  • Letter of Indemnity Definition
  • Nominal Rate of Return 

Law and Transactions Category

business transactions

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