Indemnification is a form of insurance compensation for damages or loss. A party may choose to indemnify or pay for the potential losses or damages caused by another party.
An industry vertical is a very specific classification and description of a group of companies that focuses on a shared niche or specialized market spanning multiple industries.
Information rights is a provision in a term sheet that outlines the information a company must provide its investors beyond what state law requires.
Examples of information rights provided to preferred shareholders in private companies include
financial statements, capitalization table, budget, and inspection rights.
Insolvent is a term used to describe a business or entity that is unable to pay back the debt it owes to its creditors.
Intangible assets are assets that are not physically tangible in nature. Brand recognition, goodwill, intellectual property are all examples of intangible assets. Intangible assets created by a company do not appear on a corporate balance sheet and have no recorded book value.
Intellectual property is a type of intangible asset and refers to patents, trademarks, copyrights, and trade secrets owned by a company. Intellectual property is protected by law.
Interest is the amount a lender charges to a borrower for any form of debt given, usually expressed as a percentage of the principal amount. The interest rate could be considered the fee or price a debtor pays in order to borrow capital.
An investment is an asset or item an investor acquires with the goal of generating income or appreciation. Investments involve the outlay of capital whether it be in the form of time, effort, money, or an asset for future payoff that is greater than what was initially put into the investment
An investment multiple, also known as a target rate of return, is the ideal percentage that the investor seeks to gain from their investment over a period of time. Typically VCs look set a target rate of return of between 25% and 35% per year.
An investment vehicle is a financial instrument, product, or container that houses a particular investment strategy that allows investors to earn a positive return through income and capital gains. Investment vehicles each carry different degrees of risk and can include individual securities such as stocks and bonds as well as pooled investments like ETFs and mutual funds.
An investor is a person or entity that commits capital with the expectation of generating income or profits.
Investor Rights Agreement (IRA)
An investor rights agreement outlines all of the rights that an investor has which may include, but are not limited to voting rights, inspection rights, rights of first refusal, and observer rights.
Before you sign a term sheet it is imperative that you understand the rights that your potential investors expect—do not agree to terms that you do not understand or have not discussed with your council.
An invoice is essentially an IOU used by businesses to charge their customers. They are typically leveraged in situations where a large dollar amount is due, and a credit card is not the most appropriate form of payment.
Invoice financing, also known as receivables financing, is similar to receivables factoring, except that in receivables factoring the company gives up the rights to the receivables, whereas in invoice financing the company maintains the rights to the receivables and instead borrows money against them. Invoice financing helps businesses improve cash flow, pay employees, and reinvest in operations and growth, because they can access cash today by eliminating the time between customer-go-live and the eventual bump to their top line.
Issuance of Original Securities
An issue is a process of offering securities in order to raise funds from investors. A business may issue bonds or stocks to investors in exchange for financing.
The term ‘issued shares’ refers to the number of shares that a company has allocated and are subsequently held by shareholders.