- Anti-Dilution Provision
- A clause that protects investors in a down round by issuing them additional shares. "Broad-based weighted average" is standard.
- Drag-Along Right
- The right of a majority of shareholders to force a minority to join in the sale of a company.
- Fully Diluted Shares
- The total number of shares that would be outstanding if all options, warrants, and convertible securities were exercised or converted.
- Liquidation Preference
- The right of preferred shareholders to receive their money back before common shareholders in an exit. See our guide.
- Pro-Rata Right
- The right (but not obligation) of an investor to invest in subsequent rounds to maintain their percentage ownership.
- Protective Provisions
- Veto rights held by preferred shareholders over specific corporate actions (e.g., selling the company, changing board size).
- SAFE
- Simple Agreement for Future Equity. A warrant used for early-stage fundraising. See our SAFE guide.