Key Man Clause

In an investment context, a key man clause is a contractual clause that prohibits an investment firm from making new investments in certain situations.

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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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Accelerator

An accelerator is an organisation that provides capital (usually a seed investment), mentorship, and networking connections to startups. Y Combinator, the first seed accelerator, is a well-known example.

Quality Of Earnings Report

A quality of earnings report (QoE) reveals the true financial status of a company. It digs deeper than a standard income statement, breaking down income types, sources, and future viability.

Dilution

A reduction in the ownership percentage of a shareholder due to the issuance of new shares in the company. As new shares are issued, the proportion of the company each shareholder owns decreases, potentially affecting their control, influence, and value of their investment.