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.

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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SWOT Analysis

SWOT (strengths, weaknesses, opportunities, and threats) analysis lets you see your business’s advantages and disadvantages. It can be used in several ways at different stages in the business life cycle.

Warrant

A financial instrument that gives the holder the right to purchase a specified number of shares at a predetermined price within a defined time period.

Mergers And Acquisitions

Mergers are like marriages in that both companies agree to the union, and both give up a certain amount of control and independence to become a new institution. After a merger, the newly combined entity takes on a new name and issues new stock in that name. Typically, mergers occur between companies of roughly equal size. Acquisitions, as the name suggests, are an outright purchase of one company by another, usually a larger company. Even the language surrounding acquisitions is more aggressive — the company being purchased is referred to as the “target company.” If the acquiring company buys 51% or more of the target company’s stock, it can assume control whether the target company likes it or not, in which case the acquisition is called a “hostile takeover.”