Newco The typical label for any newly organized company, particularly in the context of a leveraged buyout. New Issue Shares or bonds offered to the public for the first time. New issues may be initial public offerings by previously private companies or additional share or bond issues by companies already public.
Non-Accredited An investor not considered accredited.
No Shop, No Solicitation Clause A no shop, no solicitation, or exclusivity, clause requires the company to negotiate exclusively with the investor, and not solicit an investment proposal from anyone else for a set period of time after the term sheet is signed. The key provision is the length of time set for the exclusivity period.
Of fering Documents Documents evidencing a private-placement transaction. These include some combination of a purchase agreement and/or subscription agreement, notes or share certificates, warrants, registration-rights agreement, shareholder or investment agreement, investor questionnaire, and other documents required by the particular deal. Option A security granting the holder the right to purchase a specified number of a company’s securities at a designated price at some point in the future. Generally non-transferable, in distinction to warrants. Option Pool The number of shares set aside for future issuance to employees of a private company. Outstanding Shares The amount of common shares of a corporation that are in the hands of investors. It is equal to the amount of issued shares less treasury shares. Oversubscription This is said to occur when demand for shares exceeds the supply or number of shares offered for sale. In private placements, this occurs when a deal is in great demand because of the company’s growth prospects. Oversubscription Privilege In a rights issue, arrangement by which shareholders are given the right to apply for any shares that are not purchased.
116 A Practical Guide to Angel Investing
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