These are commonly referenced terms when discussing equity.
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Fully Common Shares Outstanding - Common stock for a company that has been authorized or issued.
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Fully Diluted Shares - Outstanding Shares + convertible securities, such as bonds, which can be converted to company common stock.
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Black-Scholes Value - A calculation to determine option value, used by Carta and Radford. Large calculation that takes into account stock volatility, expected time to exit, company value, exercise price, and risk-free rate.
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409A Valuation - Independent appraisal of the fair market value (FMV) of a company’s common stock.
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Common Stock - Stock sold to be sold at a company’s fair market value.
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Preferred Stock - Generally issued to early stage investors, and has priority for being able to be sold during a liquidity or bankruptcy event.
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Preferred Price - What investors paid for the stock in the latest funding round.
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Exercise Price - The price at which an option may be purchased for. (Also known as strike price, or 409a price, or FMV (fair market value) price).
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New Hire Grant Equity - The first equity assigned to an employee, based on the vesting start date. If multiple grants are given on the same start-day, they are combined. Note that eventually we may wish to add a requirement that to be a new hire grant, it must start vesting within a certain number of months of start date (but today we do not have this control in place).
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Refresh Grant Equity - All equity that is not granted as part of an employee’s new hire equity.
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Annualized Grant Value - The value of a grant per year that it is granted over. For example, if a 100k grant vests over 4 years, the annualized grant value is 25k.
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Intended Grant Value - The value of the grant based on the latest round of funding since when the grant was granted. For example, if a grant was granted in 2019 and the last funding round was in 2018, it is based on that share price. If there is a new valuation for the company in 2020, the intended value does not change.
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Actual Grant Value - The value of the grant based on the latest funding round relative to today. For example, if a grant was granted in 2019 and the last funding round is in 2018, the grant would have originally been based on the 2018 valuation. However, upon a new valuation in 2020, the actual value of the grant changes to reflect the latest funding round.
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Vesting Interval - The frequency at which equity vests. This will occur after a vesting cliff has been reached in a grant, assuming a cliff is included in the grant.
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Vesting Cliff - A date after a period of time from when the grant was signed that an employee receives the right to start receiving equity.
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Vesting Structure - The rate at which a grant’s equity vests over time. A back-weighted grant vests more equity toward the end of the grant schedule, where as an accelerated grant vests more equity in the beginning of a grant schedule, and a linear grant vests consistently throughout the grant at an equal rate.
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Vesting Duration - The length of time (generally in years) over which a grant vests over. Grants vesting over more than 20 years or less than 0 years are ruled out from vesting duration calculations in Advanced Equity.
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Vesting Start Date - The date that a grant starts to vest. Note that this is different than a cliff achieved date. Any vesting start date > 2100 is ruled out of calculations in Advanced Equity.
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Cliff Achieved Date - The date at which a cliff of a grant that is vesting has been reached. For example, if a grant’s vesting start date is on 1/1/2020 with a 1 year cliff, the vesting cliff date is 1/1/2021.
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Equity Burn - The total shares issued under a company's equity compensation plan in a fiscal year divided by the company's total common shares outstanding.