1.

Valuation Methods
Method 1: DCF Analysis

Discounted Cash Flow (DCF) analysis is an intrinsic value approach where an analyst forecasts the business’
unlevered free cash flow into the future and discount it back to today at the firm’s Weighted Average Cost of
Captial (WACC).

A DCF analysis is performed by building a financial model in Excel and requires an extensive amount of detail
and analysis. It is the most detailed of the three approaches, requires the most assumptions and often
produces the highest value. However, the effort required for preparing a DCF model will also often result in
the most accurate valuation. A DCF model allows the analyst to forecast value based on different scenarios,
and even perform a sensitivity analysis.

Method 2: Comparable Analysis

Comparable company analysis is a relative valuation method in which you compare the current value of a
business to other similar businesses by looking at trading multiples like P/E, EV/EBITDA, or other
ratios. Multiples of EBITDA are the most common valuation method.
 2.Terms used in Venture Capital
Acquisition
When one company buys controlling stake in another company. Can be friendly (agreed upon) or hostile (no
agreement).

Angel investor

Individual who provides a small amount of capital to a startup for a stake in the company. Typically precedes a
Seed Round and usually happens when the startup is in its infancy.

B2B

Business to business. This describes a business that is targeting another business with its product or services.
B2B technology is also sometimes referred to as enterprise technology. This is different from B2C which stands
for business to consumer, and involves selling products or services directly to individual customers.

Benchmark

The process by which a startup company measures their current success. An investor measures a company's
growth by determining whether or not they have met certain benchmarks. For example, company A has met
the benchmark of having X amount of recurring revenue after 2 years in the market.

Board of directors

A group of influential individuals, elected by stockholders, chosen to oversee the affairs of a company. A board
typically includes investors and mentors. Not all startups have a board, but investors typically require a board
seat in exchange for an investment in a company.

Bootstrapped

A company is bootstrapped when it is funded by an entrepreneur's personal resources or the company's own
revenue. Evolved from the phrase "pulling oneself up by one's bootstraps."

Bridge loan

Also known as a swing loan. Short-term loan to bridge the gap between major financing.

Buyout

A common exit strategy. The purchase of a company's shares that gives the purchaser controlling interest in
the company.

Capital

Monetary assets currently available for use. Entrepreneurs raise capital to start a company and continue
raising capital to grow the company.

Capital under management

The amount of capital, or financial assets, that a venture capital firm is currently managing and investing.
Capped notes

Refers to a "cap" placed on investor notes in a round of financing. Entrepreneurs and investors agree to place
a cap on the valuation of the company where notes turn to equity. This means investors will own a certain
percentage of a company relative to that cap when the company raises another round of funding. Uncapped
rounds are generally more favorable to an entrepreneur/startup.

Convertible debt

This is when a company borrows money with the intent that the debt accrued will later be converted to equity
in the company at a later valuation. This allows companies to delay valuation while raising funding in it's early
stages. This is typically done in the early stages of a company's life, when a valuation is more difficult to
complete and investing carries higher risk.

Debt financing

This is when a company raises money by selling bond, bills, or notes to an investor with the promise that the
debt will be repaid with interest. It is typically performed by late-stage companies.

Disruption

Also known as disruptive innovation. An innovation or technology is disruptive when it "disrupts" an existing
market by doing things such as: challenging the prices in the market, displacing an old technology, or changing
the market audience.

Due diligence

An analysis an investor makes of all the facts and figures of a potential investment. Can include an
investigation of financial records and a measure of potential ROI.

Enterprise

The term enterprise typically refers to a company or business (i.e. an enterprise tech startup is a company that
is building technology for businesses).

Entrepreneur

An individual who starts a business venture, assuming all potential risk and reward for his or herself.

Entrepreneur in residence (EIR)

A seasoned entrepreneur who is employed by a Venture Capital Firm to help the firm vet potential
investments and mentor the firm's portfolio companies.

Equity financing

The act of raising capital by selling off shares of a company. An IPO is technically a form of equity financing.

Exit
This is how startup founders get rich. It's the method by which an investor and/or entrepreneur intends to
"exit" their investment in a company. Commons options are an IPO or buyout from another company.
Entrepreneurs and VCs often develop an "exit strategy" while the company is still growing.

Fund of funds

A mutual fund that invests in other mutual funds.

Ground floor

A reference to the beginning of a venture, or the earliest point of a startup. Generally considered an advantage
to invest at this level.

Incubator

An organization that helps develop early stage companies, usually in exchange for equity in the company.
Companies in incubators get help for things like building their management teams, strategizing their growth,
etc.

IPO

Initial public offering. The first time shares of stock in a company are offered on a securities exchange or to the
general public. At this point, a private company turns into a public company (and is no longer a startup).

Lead investor

A venture capital firm or individual investor that organizes a specific round of funding for a company. The lead
investor usually invests the most capital in that round. Also known as "leading the round."

Leveraged buyout

When a company is purchased with a strategic combination of equity and borrowed money. The target
company's assets or revenue is used as "leverage" to pay back the borrowed capital.

Liquidation

The process of dissolving a company by selling off all of its assets (making them liquid).

Mezzanine financing

A form of hybrid capital typically used to fund adolescent and mature cash flow positive companies. It is a form
of debt financing, but it also includes embedded equity instruments or options. Companies at this level, which
are no longer considered startups but have yet to go public, are typically referred to as "mezzanine level"
companies.

NDA

Non-disclosure agreement. An agreement between two parties to protect sensitive or confidential

information, such as trade secrets, from being shared with outside parties.

Pivot
The act of a startup quickly changing direction with its business strategy. For example, an enterprise server
startup pivoting to become an enterprise cloud company.

Portfolio company

A company that a specific Venture Capital firm has invested in is considered a "portfolio company" of that firm.

Preferred stock

A stock that carries a fixed dividend that is to be paid out before dividends carried by common stock.

Proof of concept

A demonstration of the feasibility of a concept or idea that a startup is based on. Many VCs require proof of
concept if you wish to pitch to them.

Pro rata rights

Also known as supra pro rata rights. Pro rata is from the Latin 'in proportion.' A VC with supra pro rata rights
gives him or her the option of increasing his or her ownership of a company in subsequent rounds of funding.

Recapitalization

A corporate reorganization of a company's capital structure, changing the mix of equity and debt. A company
will usually recapitalize to prepare for an exit, lower taxes, or defend against a takeover.

ROI

This is the much-talked-about "return on investment." It's the money an investor gets back as a percentage of
the money he or she has invested in a venture. For example, if a VC invests $2 million for a 20 percent share in
a company and that company is bought out for $40 million, the VC's return is $8 million.

Round

Startups raise capital from VC firms in individual rounds, depending on the stage of the company. The first
round is usually a Seed round followed by Series A, B, and C rounds if necessary. In rare cases rounds can go as
far as Series F, as was the case with Box.net.

SaaS

Software as a service. A software product that is hosted remotely, usually over the internet (a.k.a. "in the
cloud").

Seed

The seed round is the first official round of financing for a startup. At this point a company is usually raising
funds for proof of concept and/or to build out a prototype and is referred to as a "seed stage" company.

Secondary public offering

When a company offers up new stock for sale to the public after an IPO. Often occurs when founders step
down or desire to move into a lesser role within the company.
Sector

The market that a startup companies product or service fits into. Examples include: consumer technology,
cleantech, biotech, and enterprise technology. Venture Capitalists tend to have experience investing in specific
related sectors and thus tend not to invest outside of their area of expertise.

Series

Refers to the specific round of financing a company is raising. For example, company X is raising their Series A
round.

Stage

The stage of development a startup company is in. There is no explicit rule for what defines each stage of a
company, but startups tend to be categorized as seed stage, early stage, mid-stage, and late stage. Most VCs
firms only invest in companies in one or two stages. Some firms, however, manage multiple funds geared
toward different stage companies.

Startup

A startup company is a company in the early stages of operations. Startups are usually seeking to solve a
problem of fill a need, but there is no hard-and-fast rule for what makes a startup. A company is considered a
startup until they stop referring to themselves as a startup.

Term sheet

A non-binding agreement that outlines the major aspects of an investment to be made in a company. A term
sheet sets the groundwork for building out detailed legal documents.

Valuation

The process by which a company's worth or value is determined. An analyst will look at capital structure,
management team, and revenue or potential revenue, among other things.

Venture capital

Money provided by venture capital firms to small, high-risk, startup companies with major growth potential.

Venture capitalist

An individual investor, working for a venture capital firm, that chooses to invest in specific companies. Venture
capitalists typically have a focused market or sector that they know well and invest in.

Vesting

When an employee of a company gains rights to stock options and contributions provided by the employer.
The rights typically gain value (vest) over time until they reach their full value after a pre-determined amount
of time. For example, if an employee was offered 200 stock unites over 10 years, 20 units would vest each
year. This gives employees an incentive to perform well and stay with the company for a longer period of
time.
Accelerator - the speed ramp that takes startups from adolescence to something resembling early adulthood.
Accelerator programs typically last three to six months (as opposed to incubators, which have longer time
spans) and are meant to help startups that are already performing scale up and create the organizational
framework that they’ll need to thrive.

Accredited Investor - a wealthy investor who meets certain SEC requirements for net worth and income.

Angel Investor - an accredited investor who invests their own money in a startup. They operate solo or in
smaller groups (as opposed to larger VCs) and usually focus on early-stage startups.

Antidilution - defense against dilution: these provisions are designed to protect investors by issuing them
additional shares in future funding rounds or by lowering the conversion price for their preferred shares, thus
giving them more common shares.

Blind Pool - a form of limited partnership that doesn’t specify what type of investments if will pursue.

Board-Observer Rights - even if they don’t get a vote, this person sits on the board and observes. They lean
back, letting the founders do what they’re going to do, and guide the conversation when necessary. They
might not be able to vote, but they can still influence events (plus, everything they “observe” goes back to the
VC).

Burn Rate - the rate at which a business spends money (especially VC money) in excess of revenue.

Buyout - purchasing a company or a controlling interest of a corporation’s shares, product line, or some
business.

Cap Table - a table providing an analysis of the founders' and investors' percentage of ownership, equity
dilution, and value of equity in each round of investment.

Capital Efficiency - the relationship between how many expenses are incurred by the company to how much
money is used to manufacture a good or service. Basically, how far is an investor’s money going? It can also
mean how efficiently the capital was used in terms of an exit. Ex.: raising $10M and exiting for $100M (10x) is
more efficient than raising $20M and exiting for $150M (7.5x).

Capped Note - places a cap on the value of the company at which an investor’s debt converts to equity. Ex: a
$500,000 investment translates to a 10% stake in a company with a cap of $5M.
Capped Participation - the middle ground between participating preferred stock and non-participating
preferred stock: it allows for double dipping, but only to a point. The VC is entitled to a share of the leftovers
after their liquidity preference amount has been satisfied during a liquidity event, but that share is capped (or
they can convert their PP shares to common shares). Example: if a VC has a 3x cap, then they get their 1x
liquidation preference (basically breaking even), then up to 2x of the leftover cash (so whatever cash is left
over after that goes to someone else).

Cash Position - a combination of actual cash on hand and highly liquid assets such as CDs, short-term
government debt, and other cash equivalents.

Closing - this is when all the contracts and agreements in question are signed.

Common Stock - just good old equity in a company; these shares don’t get to vote like preferred stockholders
do.

Conversion - turning preferred stock into common stock.

Convertible Debt - this is a way to raise capital while delaying valuation: these notes convert into equity at a
later date (usually a later round of funding) and the investors who invest at this time usually get a warrant
(discount) on future stock as a reward for investing at this risky time.

Convertible Stock - this is the ability for preferred stock to transform into common stock, usually at a 1:1 ratio.

Corporate VC - corporate VCs are specialized subsidiaries within corporations with a mission to spread their
cash around. Some investments are strategic (“Hey, we do similar things, let’s work together…”) or purely
financial (“That idea isn’t really in our wheelhouse, but it looks like it’s going to make money, so we want in”),
or a blend. Startups can also profit from the corporation’s experience and other resources (see value adds).

Crossover Investors - an investor who invests before, during, and after a company's IPO.

Deal Flow - the rate at which VCs discover new deals. VCs sift through tons of deals (sometimes over 1,000 per
year), outright rejecting many of them, eliminating others through research, and finally seriously pursuing
about 1% of all deals that cross their desks.

Debt Financing - selling debt to raise money. Basically taking out a loan, but instead of going through a bank,
one goes through a VC.
Dilution - just what it sounds like: before a round of funding, the founders or investors owned more of a
company than after the round. Example: a founder started off with 50% ownership, then after the round, only
owns 40%.

Disruption - originally coined by Harvard professor Clayton M. Christensen, it’s when an innovation transforms
an existing market or sector by introducing simplicity, convenience, accessibility, and affordability where
complication and high cost are the status quo.

Direct Financing - financing without an underwriter, typically the province of investment banks.

Down Round - it’s when a startup does another funding round, but instead of selling each new share for more
than the per-share price of the previous round, they go for less. Usually, this means that the company’s not
doing that well. Sub-optimal, but sometimes companies have to do a down round to raise some capital.
(See full ratchet.)

Due Diligence - the business equivalent of a full-body search. Founders hand over a business plan, financials,
team information, and more.

Employee Option Pool - the available stock that founders can award to employees in the form of options (i.e.
the ability to buy shares at a pre-set price). These options vest over time, so that employees accumulate them
gradually and are incentivized to remain at a growing company. If the company is doing well, the underlying
stock will rise in value even as the strike price remains the same, and so the options will be more valuable.

Entrepreneur in Residence - sometimes this is a seasoned entrepreneur at a VC who they rely upon to pick
winning ideas or companies, other times it can just be a big name that’s associated with a fund for (largely)
cosmetic purposes.

Equity - equity investments pay for partial ownership of a company. Stock, essentially.

Exit - the sale or exchange of a company ownership for cash, debt, or equity.

First-Mover Advantage - FMA - the advantage of getting into a market first and getting a big share of the
customers.

First-Round Financing - the first investment in a company made by outside investors.

Follow-on Investments - think of this as doubling down on a good bet: people who invested in a company
already throw in more money for another round.

“Friends and Family Round” - a form of seed round wherein founders get their friends and family to give them
money in the hopes that the stock that they’re receiving will one day be worth money. (Sometimes called the
“three fs” - friends, family, and fools, because investing in an unproven idea is so risky.)

Full Ratchet - a form of antidilution protection that sets the conversion price for preferred stock in relation to
the price of a new round of shares, regardless of how many new shares are issued. Ex.: If there were 100
shares of stock issued during the first round at $1 per share, even if the company only issues 10 more shares
during the next round, but they do it at 50 cents per share (this would be a down round), then the new
conversion price is 50 cents. Compare with weighted average.

Fund of Funds - these are larger institutional platforms that invest in many different funds. This allows
institutional investors to get allocations in some funds that, they perhaps otherwise wouldn't be able to.

Gamification - the process of adding game-like elements (points, perks, power ups, etc.) to other activities to
drive engagement.

General Partner - a partner in a VC firm who is commonly a managing partner and active in the day-to-day
operations of the business. They convince limited partners to add their money to the fund and then invest that
money for them.

Growth Equity - typically a private equity investment, usually a minority investment, in a relatively mature
company that is looking for capital to expand or restructure operations, enter new markets, or finance a
significant acquisition without a change of control of the business.

Internal Rate of Return - (sometimes referred to as “IRR”) how GPs let their investors (LPs) know how well
their investments are doing

IPO - Initial Public Offering - when a company’s shares are offered for the first time on a public market. There
tends to be a lot of cash infused into a company all at once.

Lead Investor - usually the investor putting the most money into a company during a given round of financing.
They also help negotiate and set terms and often take a seat on the board.
Limited Partner - (LPs) the investors who add their money to a VC fund and let General Partners invest that
money for them.

Liquidation - selling off all of a portfolio company’s assets; compare to (but not to be confused with) a liquidity
event.

Liquidation Preference - these provisions help insure that a VC gets paid first in relation to their investments.
Usually the VC gets a 1x multiple for their liquidation preference (which means that they’ll at least get their
money back), but they can push for more if they want, though that creates what's known as a waterfall effect
where common stock (owned by founders and employees) has to wait in line to receive their shares until all
the liquidation preferences are honored.

Liquidation Preference Stacking - this gives participants in later (higher-value) investment rounds preference
in getting paid back in the case of a liquidity event. Shouldn’t the first folks to throw in get paid back first?
Well, you’d think so, but odds are that investors put in less money during the first round than those later
investors, so they get paid back first.

Liquidity Event - an event that converts illiquid assets (stocks, usually) into cash. The most common ones (and
best, from a founder’s point of view) are IPOs, mergers, and acquisitions.

Lock-up Period - this is the period that an investor must wait before selling or trading shares subsequent to an
exit event.

Master Limited Partnership - a limited partnership that is publicly traded, combining the tax benefits of a
limited partnership with the liquidity of publicly-traded securities.

Merger - when two companies decide to come together into one company. This can be to acquire new talent,
technology, or market share.

Mezzanine Debt - debt that incorporates equity-based options (like warrants) with lower-priority debts
(remember, debt usually gets paid off first, before equity, but with lower returns). This kind of debt is actually
closer to equity than debt.

Mezzanine Financing - usually the last stage of funding before a company has their IPO, usually structured to
be repaid after said IPO.
Micro VCs - micro-VCs are smaller venture firms that primarily invest in seed stage emerging growth
companies, often have a fund size of less than $50M and may invest between $25,000 and $500,000 in a given
company.

Monetize - to get paid for something. If a company offers a free software as a service trial, then converts those
users to paid users, they’re now monetized. Things like sponsored tweets or other content also count as
monetization.

Non-Participating Preferred Stock - in a liquidity event, VCs get to choose either their liquidation preference
amount (1x, 2x, etc. whatever they already agreed upon) OR they can take the value of converting all their NPP
stock to common stock, just as they would with any form of preferred stock. Compare to Participating Prefered
Stock.

Paas - Platform as a Service - cloud computing. The company gives the client the ability to develop, run, and
manage a web application (without all the infrastructure that usually goes with that) and charge them.

Pari Passu - it’s not French, it’s Latin, and it means everyone gets treated the same in a liquidity event, it’s
basically the opposite of having a liquidation preference.

Participating Preferred Stock - this kind of stock lets the VC do a little double-dipping: basically, in the case of
a liquidity event, they get some more money after their initial payout. Example: if a VC owns 20% PP stock in a
company and it’s liquidated, they get paid out for their stock, then they get 20% of any leftover cash after all
the other investors have been paid out.

Party Round - a round of financing where generally a small amount of money is raised from a large number of
investors (commonly between 10 and 20).

Pay-to-Play - even though the pro-rata right guarantees investors the chance to maintain their ownership
percentage, they still have to pay for it. This full-on requires a VC to keep investing in future rounds to keep
from being diluted (see “follow on” and “signalling risk”).

Piggy Round - when a larger early-stage or multistage fund offers to do 80-100% of a company’s seed round

Pitch - a gutsy, heartfelt attempt to make a VC pry open its purse. The startup team will put together a
comprehensive presentation (a “deck”) and reports to show the VC that they are a good investment. They’ll
physically go to the VC’s offices, present the deck, and take questions.
Pivot - when a business plan doesn’t work, the company changes things up.

Post-Money Valuation - the value of a company after investment. (Technically this = pre-money valuation +
amount of funding raised.)

Pre-Money Valuation - the value of a company before investment.

Preferred Stock (Preferential Shares) - stock in a company that has additional rights, most commonly voting
rights. Can be converted into common stock.

Preferred Directors - board members hand-picked by the VC. What makes them special is that, in the case of a
board vote, even if there is a majority board vote on an action, if a preferred director doesn’t vote for it, then
it doesn’t get passed.

Private IPO - raising high volumes of money in the hundreds of millions of dollars (amounts that formerly
would have been brought in through an IPO) while remaining private. Sometimes, early investors will sell
shares into late-stage “private IPO” rounds. Not technically a “public offering,” but referred to as an IPO
because of how much money they bring into a company.

ROI - Return on Investment - the gain or loss generated on an investment versus how much was invested.

Runway - the amount of time until a startup runs out of money (assuming that expenses remain constant).
Determined by dividing the current cash position by the burn rate. Ex. if a company’s cash position is $100,000
and it costs $10,000 per month to run the company (that’s the burn rate), then the runway is 10 months.

SaaS - Software as a Service - a software application, hosted centrally, where users are charged a subscription.
(See also: PaaS)

Seed Money - money to get a business off the ground. Founders provide the concept and someone else (angel
investor, friends and family, etc.--sometimes VCs, too) provides the money.

Series A Funding - a company’s first “grown up” round of funding (even if they’ve raised seed/angel/friends
and family, etc.). It gets this name because of the kind of preferred stock that investors get.

Series B (and beyond) - additional rounds of funding that let a company keep raising money to make bigger
moves. Of course they’re going to need to be hitting key benchmarks (market penetration, revenue, etc.) to
prove that they deserve this extra cash.
Shares Outstanding - these shares are in play; they’ve been authorized, issued, and purchased. They’re out in
the world, people own them, and they can make stuff happen. (Contrast with Treasury Stock.)

Shareholder Vote - major company actions are often put to a vote and everyone who has preferred stock gets
to vote for or against it. The more shares one has, the more votes they get (holders of common stock don’t get
to vote).

Signaling Risk - if a previous investor chooses not to invest in the next round (follow-on), it is a bad signal to
other investors because someone with more intimate knowledge of the company than most has opted not to
deepen their investment.

Stock Options - stock that is set aside in an employee option pool for employees to purchase.

Term Sheet - the first real piece of paper a founder sees from a VC when they decide that they’re interested in
investing. It’s still gonna a pretty complicated document, but its goal is to give both sides of the table a
(relatively) short, simple summation of the points that they already agreed on. Here’s a post that contains one
company’s Series A term sheet.

Traction - getting somewhere with customers: people are buying a company’s product, subscribing to its
service, or otherwise engaging with it.

Treasury Stock - shares authorized and issued by a company that have been purchased by the company itself.

Uncapped Note - basically, the investors get no guarantee of what value the company can be valued at before
their note (debt) converts to equity. Ex. with a capped note, a $500,000 investment in a company with a $5M
cap would translate to a 10% stake in the company. However, with an uncapped note, the same $500,000 will
only translate to a 5% stake in the company if the founders get the company valued at $10M (see capped
note).

Unicorn - a private, investor-backed company valued at $1B+. (They have a pretty nifty club.)

Use of Proceeds - sometimes there are limits placed on what companies can use their newly-acquired VC
funds for; it behooves founders to keep these terms as vague as possible so that they can do whatever they
need to with that moola.
Value-Add Services (or add-on services) - so a VC isn’t just about infusing a company with cash. They also like
to help out startups with advice, technology, connections, and more. These non-financial services are also
called add-ons.

Valuation - how much a company is worth (or what people think it’s worth).

Venture Capitalist - (VCs) - investors who have collected a fund of money for investments and spread it
around to burgeoning companies.

Vesting - the lag period between when someone is awarded a stock option and when they can actually
exercise it.

Voting Rights - the ability to vote for or against company actions.

Warrant - a derivative security that lets the holder buy equity at a certain price during a certain window
(useful if the stock price goes up).

Waterfall Chart - a chart that shows in what order all private equity investors get paid.

Weighted Average - this is a more moderate antidilution protection approach that uses a formula that takes
into account not only the share price of the new issuance, but also the old stock price, number of shares
issued, and number of shares overall. It’s more moderate than a full ratchet, which sets the new price without
respect to any of these factors.
 3.Instruments used in Venture Capital

1. Prior preferred stock—Many companies have different issues of preferred stock outstanding at one
time; one issue is usually designated highest-priority. If the company has only enough money to meet
the dividend schedule on one of the preferred issues, it makes the payments on the prior preferred.
Therefore, prior preferred have less credit risk than other preferred stocks (but usually offer a lower
yield).

2. Preference preferred stock—Ranked behind a company's prior preferred stock (on a seniority basis)
are its preference preferred issues. These issues receive preference over all other classes of the
company's preferred (except for prior preferred). If the company issues more than one issue of
preference preferred, the issues are ranked by seniority. One issue is designated first preference, the
next-senior issue is the second and so on.

3. Convertible preferred stock—These are preferred issues which holders can exchange for a predetermined
number of the company's common-stock shares. This exchange may occur at any time the investor
chooses, regardless of the market price of the common stock. It is a one-way deal; one cannot convert the
common stock back to preferred stock. A variant of this is the anti-dilutive convertible preferred recently
made popular by investment banker Stan Medley who structured several variants of these preferred for
some forty plus public companies. In the variants used by Stan Medley the preferred share converts to
either a percentage of the company's common shares or a fixed dollar amount of common shares rather
than a set number of shares of common. The intention is to ameliorate the bad effects investors suffer
from rampant shorting and dilutive efforts on the OTC markets.
4. Cumulative preferred stock—If the dividend is not paid, it will accumulate for future payment.
5. Exchangeable preferred stock—This type of preferred stock carries an embedded option to be exchanged
for some other security.
6. Participating preferred stock—These preferred issues offer holders the opportunity to receive extra
dividends if the company achieves predetermined financial goals. Investors who purchased these stocks
receive their regular dividend regardless of company performance (assuming the company does well
enough to make its annual dividend payments). If the company achieves predetermined sales, earnings or
profitability goals, the investors receive an additional dividend.
7. Perpetual preferred stock—This type of preferred stock has no fixed date on which invested capital will
be returned to the shareholder (although there are redemption privileges held by the corporation); most
preferred stock is issued without a redemption date.
8. Putable preferred stock—These issues have a "put" privilege, whereby the holder may (under certain
conditions) force the issuer to redeem shares.
9. Monthly income preferred stock—A combination of preferred stock and subordinated debt.
10. Non-cumulative preferred stock—Dividends for this type of preferred stock will not accumulate if they are
unpaid; very common in TRuPS and bank preferred stock, since under BIS rules preferred stock must be
non-cumulative if it is to be included in Tier 1 capital.
11. Vanilla convertible bonds are the most plain convertible structures. They grant the holder the right to
convert into a certain number of shares determined according to a conversion price determined in
advance. They may offer coupon regular payments during the life of the security and have a fixed
maturity date where the nominal value of the bond is redeemable by the holder.
12. Mandatory convertibles are a common variation of the vanilla subtype, especially on the US market.
Mandatory convertible would force the holder to convert into shares at maturity—hence the term
"Mandatory". Those securities would very often bear two conversion prices, making their profiles similar
 to a "risk reversal" option strategy. The first conversion price would limit the price where the investor
would receive the equivalent of its par value back in shares, the second would delimit where the investor
will earn more than par. Note that if the stock price is below the first conversion price the investor would
suffer a capital loss compared to its original investment (excluding the potential coupon payments).
Mandatory convertibles can be compared to forward selling of equity at a premium.
13. Reverse convertibles are a less common variation, mostly issued synthetically. They would be opposite of
the vanilla structure: the conversion price would act as a knock-in short put option: as the stock price
drops below the conversion price the investor would start to be exposed the underlying stock
performance and no longer able to redeem at par its bond. This negative convexity would be
compensated by a usually high regular coupon payment.
14. Packaged convertibles or sometimes "bond + option" structures are simply a straight bonds and a call
option/warrant wrapped together. Usually the investor would be able to then trade both legs separately.
Although the initial payoff is similar to a plain vanilla one, the Packaged Convertibles would then have
different dynamics and risks associated with them since at maturity the holder would not receive some
cash or shares but some cash and potentially some share. They would for instance miss the modified
duration mitigation effect usual with plain vanilla convertibles structures.

4. Startup Business Ecosystem

The above 7 pointers are crucial for a start up to flourish and grow at its potential. Necessary steps need to be
taken to make sure that these objectives are fulfilled.
Running a business is like running a marathon: Maintain a measured pace and resist the urge to start too fast.
“You need to run one kilometer 42 times, not all at once,” he says
Porters Five forces

A PESTEL analysis or PESTLE analysis (formerly known as PEST analysis) is a framework or tool used to analyse
and monitor the macro-environmental factors that may have a profound impact on an organisation’s
performance. This tool is especially useful when starting a new business or entering a foreign market.