Term-sheet cheat sheet
Venture Deals
| Term | Statement | Favors | Source |
|---|---|---|---|
| 409a valuation | Higher 409A valuations for common stock increase the exercise price of employee stock options, reducing employee gains at liquidity events since the spread between sale price and exercise price narrows. | not applicable | |
| 83b election | The 83(b) election form is a simple two-minute filing that must be submitted to the appropriate IRS service center, and can be obtained from counsel or by downloading online. | neutral | |
| accredited investor | Non-accredited investors who purchase private company stock may hold an SEC-protected right of rescission, allowing them to force the company to repurchase their shares at the original purchase price at any time, regardless of company performance. | investor | |
| acquisition accounting | Under purchase accounting treatment, there is no meaningful accounting impact from modifying vesting arrangements or accelerating vesting in a merger. | neutral | |
| acquisition exit | Acquisition negotiations often include retention dynamics for management, and proceeds may be reallocated from investors to management depending on VC style and future relationship intentions. | founder | |
| analyst role | Analysts are typically the most junior employees at VC firms, often recent college graduates with limited power and responsibility, primarily focused on financial analysis/modeling and memo writing. | neutral | |
| anchoring | Anchoring involves selecting a few key positions, stating them clearly, and maintaining them while retaining flexibility to trade away less important points in negotiation. | neutral | |
| angel investor | Angels typically invest in early rounds and often do not participate in future rounds, but their participation in difficult future financing rounds may become a negotiation issue if the company experiences challenges. | not applicable | |
| anti dilution | Issuance of shares beyond the approved Employee Pool without Required Approval (majority board approval including at least one investor-designated director) triggers anti-dilution adjustment of the conversion price and subjects the shares to Investors' right of first offer. | investor | |
| antidilution | Antidilution adjustments apply to multiple closings or tranched issuances as if all stock had been issued at the first closing. | not applicable | |
| antidilution protection | Series A Preferred conversion price adjusts (full ratchet or weighted average) to reduce dilution when the Company issues additional equity below the conversion price, with specified carve-outs for employee shares, business combinations, equipment/debt financing, and waivers. | not applicable | |
| asset deal | Buyers often request asset deal structures intending to purchase only desired assets while leaving liabilities and obligations behind. | not applicable | |
| assignment | Each investor may transfer all or part of its Series A Preferred shares to affiliated partnerships or funds managed by it or their directors, officers, or partners, provided the transferee agrees in writing to be bound by the Stock Purchase Agreement. | investor | |
| associate | Associates typically do not hold deal partnership status; they scout for deals, conduct due diligence, manage cap tables, and may transition to portfolio companies, business school, or entrepreneurship after roughly two years. | not applicable | |
| associate role | Associates in VC firms are typically not deal partners; they work for managing directors and spend significant time managing the capitalization table that defines deal economics. | not applicable | |
| at will employment | Employment offer letters must explicitly designate employees as at-will to avoid state employment law restrictions on termination. | not applicable | |
| automatic conversion | When a board decides to pursue an IPO, it creates pressure on VC investors to waive or relax automatic conversion threshold provisions. | founder | |
| batna | Best Alternative to Negotiated Agreement (BATNA) is the backup plan if agreement is not reached, such as accepting alternative term sheets, bootstrapping, operating independently, or settling litigation. | neutral | |
| binding provisions | Part One of a letter agreement does not create legally binding obligations on any parties or target companies, except as expressly provided in the Binding Provisions or in a separate binding written agreement. | neutral | |
| binding terms | Only the legal fees and expenses, no-shop agreement, right to conduct activities, and governing law provisions are binding upon execution; all other provisions are non-binding and subject to conditions precedent. | neutral | |
| board control | Series A Preferred holders, voting as a separate class, elect one or more Board members designated by the investor. | investor | |
| board observer | Board observers can be included as part of a VC agreement either instead of or in addition to official board membership. | investor | |
| board of directors | When multiple constituencies elect directors, the selection method for remaining directors can be either mutual consent of Common and Preferred shareholders voting as a single class or mutual consent of the Board of Directors. | neutral | |
| breakup fee | Breakup fee does not serve as the exclusive remedy; the Buyer retains all other rights and remedies under law or equity for breach of the no-shop or other binding provisions. | investor | |
| business plan | A business plan is a 30-page document detailing market, product, target customer, go-to-market strategy, team, and financials. | neutral | |
| cap table | A capitalization table summarizes ownership percentages before and after a financing round, showing who owns what portion of the company. | not applicable | |
| cap table calculation | Founder ownership percentage equals 100 percent minus investor percentage minus employee option pool percentage. | not applicable | |
| capital call | When LPs cannot or will not fund a capital call, VCs can sell the LP's interest to a new LP in the secondary market rather than fail to make investments. | not applicable | |
| capitalization table | Company shall provide an updated post-closing capitalization chart and corporate officers' contact information prior to closing. | investor | |
| carried interest | Carried interest (carry) is the profit VCs receive after returning committed capital to limited partners. Standard carry is 20 percent of profits after returning capital, although top-performing or established funds may take up to 30 percent. | not applicable | |
| carry | Clawback occurs when a VC fund distributes carry to partners during the investment period based on interim profits, but the fund ultimately returns the same amount invested or less, requiring partners to return the previously distributed carry to LPs. | not applicable | |
| carve out | A carve-out in equity allows shareholders to agree to give a preferential payment to executives and employees ahead of other shareholders, typically used when liquidation preferences leave employees without sufficient financial interests. | neutral | |
| clawback | A clawback is a provision in a limited partnership agreement that allows investors to take back money from a VC if the VC overpays itself with carry. | investor | |
| co sale agreement | A co-sale agreement gives investors the right to sell a proportional amount of their stock if founders sell shares, and this right terminates upon a Qualified IPO. | investor | |
| co sale rights | Founders' shares are subject to a co-sale agreement granting Investors the right to participate pro rata in any sale, transfer, or exchange of Founder stock; this right terminates upon a Qualified IPO. | investor | |
| commitment period | A VC fund's commitment (investment) period is the defined window—typically around five years—during which the fund can make new investments; after it expires, the fund is generally limited to follow-on investments in existing portfolio companies, which may continue through the broader investment ter | neutral | |
| common stock | Founders receive common stock when companies are created; VCs typically purchase preferred stock when investing. | neutral | |
| conditions precedent | Term sheets typically contain conditions precedent to financing that allow investors to exit the deal for various reasons, such as unsatisfactory legal documentation, failed due diligence, or unacceptable budgets. | investor | |
| conditions to close | Conditions to close in an LOI, such as material adverse change clauses or specific contingencies, are easily triggered by buyers who wish to terminate the deal. | investor | |
| confidential information | Information is not considered confidential if already known to the Buyer, known to third parties not bound by confidentiality, or becomes publicly available through no fault of the Buyer. | neutral | |
| confidentiality | Upon written request, the Buyer must promptly return Confidential Information to Sellers or Target Companies or destroy it, and certify in writing that it has done so. | founder | |
| conflict of interest | Investor has the right to invest in companies competitive with the Company without liability to the Company, and investors' representatives may assist competitive companies without creating liability, regardless of detrimental effect. | investor | |
| control provisions | Control provisions in VC-backed companies allow investors to maintain oversight and compliance with federal tax statutes despite owning less than 50% of the company. | investor | |
| control terms | Control terms are contractual provisions that allow a VC to exert positive or veto control in a deal. | not applicable | |
| conversion | Preferred shareholders can elect to convert to common on a liquidation event if they would receive more value on an as-converted common basis than through the liquidation preference and participation rights. | not applicable | |
| conversion price adjustment | Conversion price adjusts proportionally for stock splits, stock dividends, combinations, recapitalizations, and similar events. | not applicable | |
| conversion rights | Series A Preferred is convertible into Common Stock at an initial 1:1 rate (subject to adjustment), either voluntarily at the holder's election at any time, or automatically upon consent of a majority of the outstanding Series A Preferred. | neutral | |
| convertible debt | A price cap in convertible debt means the investor receives equity at the later round price or a capped maximum valuation, whichever is lower. | investor | |
| cost allocation | Each party bears its own costs and expenses including broker fees and representative expenses; Buyer and Sellers split HSR Act filing fees equally. | neutral | |
| cross fund investing | Cross-fund investing occurs when a later fund fills reserve gaps in an earlier fund, typically to protect the VC firm's position across portfolio companies. | not applicable | |
| cross fund investment | Cross-fund investment occurs when a VC firm operates multiple funds and more than one fund invests in the same company. | not applicable | |
| cumulative dividend | Cumulative dividends optionally payable in stock, cash, or as conversion adjustments create complex accounting obligations. | neutral | |
| deal costs | Each party bears its own costs and expenses in pursuing or consummating the acquisition, including broker fees and representative expenses. | neutral | |
| deal structure | Deal structure, tax optimization, and form of consideration (e.g., stock vs. cash) are interdependent variables that ultimately impact the effective price received by the seller. | neutral | |
| deemed liquidation | A merger, acquisition, sale of voting control, or sale of substantially all assets in which shareholders do not retain majority ownership of the surviving corporation's outstanding shares is treated as a liquidation event, triggering liquidation preference provisions. | neutral | |
| demand registration rights | Demand registration rights cannot be exercised before the third anniversary of closing, and the Company may delay registration for up to 90 days in any 12-month period; Company is obligated to effect no more than two registrations under demand rights. | not applicable | |
| director | A director is a junior deal partner at a VC firm. | not applicable | |
| director expenses | Company shall reimburse Series A Preferred directors and observers for reasonable expenses incurred in attending Board meetings and Company-related events. | neutral | |
| directors officers insurance | Company must obtain directors' and officers' insurance acceptable to investors as soon as practicable after closing. | investor | |
| dividend | Series A Preferred holders also participate pro rata in any dividends paid on Common Stock on an as-if-converted basis. | investor | |
| double trigger acceleration | If a Founder or Employee is terminated without cause within one year following a merger, consolidation, asset sale, or change of control, that person receives one year of additional vesting acceleration; no other acceleration applies. | founder | |
| down round | A down round is a financing round completed at a lower valuation than the previous round. | not applicable | |
| down round dynamics | A new lead investor in a subsequent round may be motivated to modify unfavorable terms from prior financings if the company is performing well. | founder | |
| drag along agreement | A drag-along agreement is a term that sets up a proxy on stock ownership to vote the same way as others on a particular issue. | not applicable | |
| drag along rights | Holders of Series A Preferred with a majority agreement on sale or liquidation may drag along remaining Series A Preferred holders (and potentially Common Stock holders) to consent to such transaction. | investor | |
| due diligence | Due diligence is the process by which investors explore a company they are considering investing in. | not applicable | |
| due diligence requests | During VC diligence, founders will be asked for presentations, projections, customer pipeline, development plans, competitive analysis, and team bios; the rigor and busywork level varies by firm. | not applicable | |
| earn out | An earn-out is an amount agreed upon by an acquirer and target company that former shareholders will receive if certain performance milestones are met post-merger. | not applicable | |
| economics | Economics terms are contractual provisions that impact the returns of a VC's investment in a company. | not applicable | |
| elevator pitch | An elevator pitch is a one- to three-paragraph business description (not a separate document) that should be embedded in an introductory email and include an introductory paragraph, business description, and clear call-to-action for the next step. | neutral | |
| employee pool | When employee pool size increases on a postfinancing basis from 10% to 20%, old shareholders' ownership is reduced by 10 percentage points while new investors' stake remains unchanged. | investor | |
| entire agreement | The Binding Provisions constitute the entire agreement and supersede all prior agreements, understandings, and representations; they may be amended only by a writing executed by all parties. | neutral | |
| entrepreneur in residence | Entrepreneurs in residence (EIRs) are experienced entrepreneurs who work part-time at VC firms for 3-12 months while developing their next company, often assisting with introductions and due diligence. | not applicable | |
| escrow | Any escrow claim brought by the buyer reduces the actual purchase price received by the seller. | investor | |
| exclusivity | During exclusivity period, sellers may not solicit, entertain, negotiate, encourage, discuss, accept or consider acquisition proposals from other parties for shares or assets, and must immediately notify buyer of any such contact. | not applicable | |
| executive summary | An executive summary is a one- to three-page document serving as the first substantive interaction with a prospective investor and functions as the basis for first impression; it is likely to be circulated within the VC firm. | neutral | |
| expense reimbursement | VCs may charge portfolio companies for all reasonable expenses associated with board meetings; founders should confront or escalate concerns if VCs spend excessively on discretionary travel and accommodation. | neutral | |
| fiduciary duty | Directors and officers owe a fiduciary duty to creditors only when the company lacks sufficient cash to pay liabilities. | neutral | |
| form of consideration | When receiving stock as consideration, the acquirer must verify whether the stock is freely tradable, registered, subject to lockup restrictions, and whether they will be deemed an insider after close with resulting selling restrictions. | not applicable | |
| founder commitment | Founders must devote 100% of professional time to the Company; other professional activities require Board approval. When a Founder leaves, that Founder must vote remaining shares proportionally to all other shares. | investor | |
| founder vesting | Founders' existing Common Stock is subject to similar vesting terms, with credit for one year of vesting as of Closing and remaining unvested shares vesting monthly over three years. | not applicable | |
| founders activities clause | A typical founders' activities clause requires 100 percent of founder professional time to be devoted to the company, with all other professional activities requiring board approval. | investor | |
| founders stock | Founders' stock held outright through purchase at company formation is technically subject to company buy-back rights (not vesting), though economically similar and with different tax consequences. | neutral | |
| fully diluted | Fully diluted capitalization assumes conversion of all outstanding preferred stock, exercise of all authorized and existing stock options and warrants, and the increase of the existing option pool by a specified number of shares prior to financing. | neutral | |
| fund allocation | VC fund capital is deployed for investments, management fees, and operating expenses including audits, tax filings, and litigation. | not applicable | |
| fund extension | Beyond 12 years, LPs must vote annually to approve continued fund operation; management fees for extended periods typically range from a reduced percentage of remaining invested capital to being waived entirely. | not applicable | |
| fund reservation | A VC firm has motivation to overreserve to reach the fund-raising threshold, but this is countered by negative economic dynamics from not fully investing the fund. | not applicable | |
| fundraising materials | Minimum fundraising materials required are: a short business description, an executive summary, and a presentation (PowerPoint); business plans and private placement memoranda (PPMs) are more common in later-stage rounds. | neutral | |
| fundraising sizing | The target raise amount should be determined by estimating monthly burn rate and the time needed to reach a clear, demonstrable milestone (such as shipping first product or achieving specific user/revenue targets), rather than precise financial modeling. | not applicable | |
| game theory | Game theory rules underlying negotiations are independent of participants and predictably shape outcomes regardless of individual skills. | neutral | |
| hsr act | Buyer and Seller(s) must cooperate and proceed as promptly as reasonably practicable to prepare and file all notifications required under the HSR Act during the period from the Signing Date until the Termination Date. | neutral | |
| hsr filing | Buyer and Sellers split the HSR Act filing fee equally (50/50). | neutral | |
| indemnification | Company charter documents shall limit board members' liability and exposure to damages to the broadest extent permitted by applicable law. | investor | |
| information rights | The only meaningful variation in information rights negotiation is imposing a threshold on the number of shares held (finite number versus any) for investors to retain these rights. | neutral | |
| insolvency | Outstanding employment litigation claimants are treated as creditors for purposes of insolvency liability. | neutral | |
| intellectual property | When third parties claim IP ownership based on early-stage discussions or informal involvement, VCs will pause diligence and require resolution of the claim before proceeding with investment. | not applicable | |
| investment process | Upon a VC decision to invest, the next step in the process is issuance of a term sheet by the VC firm. | not applicable | |
| ip assignment | Each current and former officer, employee, and consultant must enter into a proprietary information and inventions agreement acceptable to the Company. | not applicable | |
| ip ownership | A proprietary information and inventions agreement is a mechanism that legally establishes the company's ownership of intellectual property and benefits both the company and investors. | neutral | |
| ipo directed shares | In a Qualified IPO, the company shall use best efforts to cause the managing underwriters to offer investors the right to purchase at least 5% of the shares issued under a directed shares (friends and family) program, subject to applicable securities laws. | investor | |
| key man clause | A key man clause is a common provision in VC fund agreements specifying what happens if a designated number of partners, or a specific named partner, departs the firm; when triggered, it typically permits LPs to suspend new investments or shut down the fund. | neutral | |
| lead investor | Entrepreneurs should insist that all investors verbally agree the lead investor can speak for the entire syndicate on investment terms to avoid renegotiating the same deal multiple times. | founder | |
| lead vc | A financing can have co-lead VCs, typically two but occasionally three, who jointly take leadership roles. | neutral | |
| legal fees | Company must pay investor counsel's reasonable fees, not to exceed a specified amount, regardless of whether the transaction closes, payable at closing or upon investor's notice of negotiation termination. | investor | |
| letter of intent | Binding provisions of letter of intent include access rights, exclusive dealing, and breakup fee obligations, enforceable between buyer and sellers. | not applicable | |
| light preferred | Light preferred structures help maintain a low common stock price for employee option grants while raising capital from investors, due to IRS Section 409A tax implications of setting common stock valuation too high. | neutral | |
| liquidation event | An IPO is generally not treated as a liquidation event; it is a funding event in which preferred stock is typically converted to common stock, thereby avoiding liquidation preference implications. | neutral | |
| liquidation preference | With 1× participating preference, investors first receive their full investment amount, then participate pro-rata in remaining proceeds alongside common shareholders. | not applicable | |
| lockup agreement | In an IPO lockup agreement, any discretionary waiver or termination of restrictions granted by the company or underwriter representatives must be applied to Major Investors pro rata based on the number of shares held. | investor | |
| lockup provision | Each investor agrees not to sell shares for up to 180 days following the effective date of the Company's IPO, provided all officers, directors, and 1 percent shareholders are similarly bound. | not applicable | |
| lpa | VCs operate under governance by their limited partners through the limited partnership agreement, making investors (LPs) the ultimate authority over VC decision-making. | not applicable | |
| management company | The management company is the persistent franchise entity that survives fund lifecycle changes and services all raised funds, while individual LP vehicles are created and retired as new funds are raised. | not applicable | |
| management fee | VC firms receive management fees regardless of investment performance. Fee arrangements for each fund are guaranteed for 10 years, which delays the financial consequences of poor returns. | not applicable | |
| management retention | Management retention pool, net working capital, and earn-outs are negotiation points affecting deal certainty and price. | not applicable | |
| management retention pool | Management retention pools built into the purchase price are conditional, paid out over several years only to management members who remain at the acquirer, and are forfeited upon departure. | investor | |
| managing director | A managing director is a senior partner in a VC firm. | not applicable | |
| materiality qualifiers | Materiality qualifiers involve inserting the word 'material' in front of protective provisions and similar contractual terms. | not applicable | |
| mentor | Mentor compensation via options should include vesting contingent on the entrepreneur's ongoing satisfaction with the mentor's advisory performance. | founder | |
| micro vc | A micro VC is a super angel who raises a small fund composed of professional investors. | not applicable | |
| multiplay game | A multiplay game in VC financing is a continuing relationship after the transaction is completed where the VC and entrepreneur work together. | not applicable | |
| no implied obligation | Except as expressly provided in the Binding Provisions or in any future binding written agreement, no action, course of conduct, or failure to act relating to the acquisition will give rise to any obligation or liability on the parties or target companies. | neutral | |
| no shop | In a unilateral no-shop, the buyer can cancel without obligation, meaning sellers may be locked up for the entire no-shop period even if the deal fails. | not applicable | |
| no shop agreement | No-shop and exclusivity obligations terminate if both parties mutually agree not to proceed with definitive documents. | neutral | |
| non binding | Part One of the letter does not constitute any legally binding obligation on any party or target companies. | neutral | |
| noncompete agreement | Sellers must execute noncompetition agreements with specified duration in favor of buyer and company at closing. | not applicable | |
| nondisclosure agreement | A nondisclosure agreement in an LOI is typically one of the few legally binding provisions, along with jurisdiction and breakup fees. | not applicable | |
| operating partner | An operating partner at a VC firm is positioned between managing director and principal level. | not applicable | |
| option assumption | When a buyer assumes unvested options in a merger, the consideration allocated to employees with unvested options is pulled from what would otherwise go to preferred stockholders and former founders. | neutral | |
| option basis | The basis (strike price) of stock options reduces their economic value; the actual value of an option equals the stock value minus the basis amount. | neutral | |
| option pool | An employee option pool expressed on a post-money basis reduces founder ownership percentage while keeping the post-money valuation constant. | not applicable | |
| option treatment | Unexercised employee options and warrants are typically terminated at closing in an acquisition unless the LOI specifies otherwise, with no consideration paid to holders. | investor | |
| option value | When a transaction price falls below the liquidation preference, options become out-of-the-money and worthless regardless of their nominal value or basis. | neutral | |
| ordinary course | Sellers must cause Target Companies to operate in the ordinary course and refrain from extraordinary transactions during the period from Signing Date until Termination Date. | investor | |
| original purchase price | Original Purchase Price in a term sheet establishes the per-share price used to calculate fully diluted premoney and postmoney valuations, with fully diluted status assuming conversion of all preferred stock, exercise of all options and warrants, and a specified increase to the option pool prior to | not applicable | |
| pari passu | Pari passu means all classes of preferred stock have equivalent payment rights in a liquidation. | not applicable | |
| pari passu preferences | Pari passu or blended preferences approach treats all series as equivalent in status, sharing proceeds pro-rata until preferences are returned. | not applicable | |
| participation cap | A participation cap (e.g., 3×) limits investor returns in liquidation to a multiple of their investment, converting participating preference to nonparticipating once the cap is reached. | not applicable | |
| pay to play | Softer pay-to-play versions allow partial conversion of preferred stock to common stock proportional to the extent an investor fails to meet its pro rata contribution in a Qualified Financing. | neutral | |
| piggyback registration | Except in the Company's initial public offering, investor shares to be sold in a registration shall not be reduced below 30 percent of the total securities included in the registration. | not applicable | |
| piggyback registration rights | Series A Preferred holders have piggyback registration rights on all Company registrations and any other investor demand registrations, but the Company and underwriters may reduce shares pro rata due to market conditions; in such reductions, only the Company or the invoking investor may sell. | not applicable | |
| pitch presentation | A VC presentation is typically 10 to 20 pages of PowerPoint conveying the same information as an executive summary in visual form, with style varying based on audience size and context. | neutral | |
| post money valuation | Post-money valuation equals pre-money valuation plus the investment amount; investor ownership percentage equals investment divided by post-money valuation. | not applicable | |
| postmoney valuation | Postmoney valuation is the value of a company after an investor has put money into the company. | not applicable | |
| preferred stock | Preferred stock is a type of stock with preferential terms, rights, and privileges compared to common stock. | not applicable | |
| premoney valuation | Premoney valuation is the value ascribed to a company by an investor before investing in the company. | not applicable | |
| principal | Principals or directors are junior deal partners working toward managing director promotion; they hold some deal responsibility but typically require managing director support to move deals through the firm. | not applicable | |
| private placement memorandum | A private placement memorandum is a traditional business plan combined with extensive legal disclaimers and boilerplate, prepared by lawyers at significant cost. | not applicable | |
| private stock | When receiving private company stock, the acquirer's capital structure—including existing equity claims and liquidation preferences—must be understood to determine actual value received. | not applicable | |
| pro rata rights | A pro rata right is the right of a shareholder to purchase shares in a future financing equal to the percentage the shareholder currently holds. | not applicable | |
| proprietary information agreement | All employees, officers, and consultants (including founders) should sign proprietary information and inventions assignment agreements before outside venture financing closes, to ensure clean IP ownership and avoid disputes. | neutral | |
| protective provisions | Protective provisions typically require investor consent to increase or decrease the authorized size of the company's Board of Directors. | not applicable | |
| public disclosure | Neither party may make public comment or disclose the existence of discussions or terms of a possible transaction without prior written consent of the other party, unless required by law with prior notice. | neutral | |
| public stock | When receiving public company stock, tradability status, registration, lockup agreements, insider selling restrictions, and registration rights all materially affect the value of consideration received. | not applicable | |
| purchase price | Purchase price adjusts dollar-for-dollar based on changes in target company consolidated stockholders' equity between signing and closing. | not applicable | |
| ratchet based antidilution | Ratchet-based antidilution reprices an investor's shares in previous rounds, usually through conversion price adjustment, to the price paid in the current round. | not applicable | |
| redemption rights | Redeemable preferred stock that is not mandatorily redeemable is properly classified as equity, not a liability, under standard accounting treatment. | neutral | |
| registration rights | Company is limited to effecting no more than two demand registrations under demand right provisions. | not applicable | |
| representations and warranties | Representations and warranties are provisions in a financing purchase agreement or merger agreement whereby the company makes certain assurances about itself. | not applicable | |
| reserves | When a VC firm underreserves relative to aggregate capital needs, it must triage portfolio companies, leading to non-investment, indirect resistance to financings, dilution limitations, or pressure to sell. | not applicable | |
| reverse dilution | Reverse dilution occurs when stock is returned to a company by departed employees whose stock has not vested, increasing the effective ownership of all shareholders. | not applicable |