Capital Efficiency

Capital efficiency is a measure that estimates how efficiently the capital is deployed.

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This glossary provides an overview of some key legal terms for startups. It's essential to consult with a legal professional to ensure a comprehensive understanding of these terms and their implications for your specific situation.

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Fund Of Funds

A fund of funds or "FOF" is a type of investment fund that only invests in other investment funds. This means that the overall portfolio of investments it manages consists purely of other investment funds that may or may not be managed by the same company.

Engagement Letter

An engagement letter outlines the terms of a client relationship. Businesses and clients who agree to work together under certain terms often use an engagement letter to put the details of the agreement in writing.

Secondary Sale

A secondary sale refers to the sale of existing securities or assets, such as shares of stock, from one investor to another within the secondary market. Unlike primary sales, where funds raised from issuing new securities go directly to the issuing company (such as in an IPO or initial public offering), in a secondary sale, the funds go to the selling shareholder, not to the company whose shares are being traded.