Share Options 1) The right to purchase or sell shares at a specified price within a stated period. Options are a popular investment medium, offering an opportunity to hedge positions in other securities, to speculate on shares with relatively little investment, and to capitalize on changes in the market value of options contracts themselves through a variety of options strategies. 2) A widely used form of employee incentive and compensation. The employee is given an option to purchase its shares at a certain price (at or below the market price at the time the option is granted) for a specified period of years. Strategic Investors Corporate or individual investors that add value to investments they make through industry and personal ties that can assist companies in raising additional capital as well as provide assistance in the marketing and sales process. Tag-Along Rights / Rights of Co-Sale A minority-shareholder protection affording the right to include their shares in any sale of control and at the offered price. Tender Of fer An offer to purchase shares made directly to the shareholders. One of the more common ways hostile takeovers are implemented. Term Sheet A summary of the terms the investor is prepared to accept. A non-binding outline of the principal points that the Share Purchase Agreement and related agreements will cover in detail. Time Value of Money The basic principle that money can earn interest; therefore, something that is worth $1 today will be worth more in the future if invested. This is also referred to as future value. Treasury Shares Shares issued by a company but later reacquired. It may be held in the company’s treasury indefinitely, reissued to the public, or retired. Treasury shares receive no dividends and does not carry voting power while held by the company.
120 A Practical Guide to Angel Investing
Powered by FlippingBook