Rate Of Return Formula

A limit on the conversion price of a convertible security, such as a SAFE or ASA, used to protect investors from excessive dilution in future funding rounds.

A limited partner owns a stake in a business partnership with limited liability. They work with at least one General Partner who manages the day-to-day operations of the business. They expect returns from General Partners.

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.