Fundraising and Equity Terms

The revenue is a business’ income generated from normal operations. Such income comes from sales, fees earned, interest revenue, and other sources. For a business selling a product, revenue is calculated by multiplying the Sales Price and Units of Product Sold.

Everyone's nightmare scenario is that the day after the investment, one of the Founders skips off to another project or becomes unable to perform their duties and all need to find a replacement; such new senior employee will therefore be able to work to increase the value, including the value of the already vested shares.

Suppose the shareholders have a Right of First Refusal, whereby they want to sell their shares. In that case, a shareholder must notify in writing all other shareholders in such respect, indicating the proposed price, the detailed identification of the transferee's third-party and the selling conditions.

A risk analysis is an analysis that identifies the potential threats that could impact the normal operations of businesses. It predicts what may negatively impact a business, in what ways, and the likelihood of such a negative impact.

Robotics is a branch of technology that focuses on all the processes behind robots, including design, construction, operation and application.

A Sale and Purchase Agreement is a legally binding contract outlining the agreed-upon conditions of the buyer and seller of a property. It is the primary legal document in any sale process. It essentially sets out the agreed elements of the deal, includes several significant protections for all involved parties and provides the legal framework to complete the sale. The SPA is therefore of critical importance to both sellers and buyers.

Seed funding is one of the first equity funding steps. Much of the seed capital raised by a company may come from sources close to its founders, i.e., family, friends, and acquaintances. Obtaining seed capital is the first out of the four funding stages required for a startup to become a fully-fledged business.

Senior liquidation preferences refer to investors prioritizing having their money returned even before the holders of preferred stock. This is different from the more common deals in which shares of the same class are treated equally.

Series A is a type of financing round in a startup's capital-raising journey, after pre-seed and seed rounds. A business can apply for Series A funding once it has established consistent revenue streams and a solid customer base.

Series B is a subsequent financing round (after Series A) for a company that has reached specific milestones beyond the primary stages and wants to grow to meet all levels of demand. It's about taking a business to the next level, past the development stage.