Liquidity Event

A liquidity event is an exit strategy that private company ownership uses to cash out all or a portion of shares.

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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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Profit Margin Formula

Profit margins are as vital to businesses as they are to financial investments and stocks. Similarly, profit margins form an essential element of accounting practices. Margins also mean different things in these three spheres: commerce, accounting, and investing.

Exit

An ‘exit’ is when a founder leaves a startup. For many founders, this is something they’ve planned for from day one, perhaps even hoping to build a unicorn company. They created the startup with the plan of cashing out at some point by selling ownership of the company either to investors or to another company.

Advance Subscription Agreement (ASA)

An agreement for future equity, allowing investors to invest in a company now and receive shares in a future funding round.