Category Archives: Startup Jargon/Definitions

What Is the Difference Between Warrants and Options?

What is the difference between warrants and options? Is there a difference? Warrants and stock options are similar in that they are both contractual rights to buy stock of a company, at a price fixed in the contract, and for … Continue reading

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Participating vs. Non-Participating Preferred Stock

Q: What is participating preferred stock? What distinguishes it from non-participating preferred stock? Who prefers participating preferred stock, and who prefers non-participating preferred stock? A: Participating preferred stock is preferred stock that entitles the holder to a specified preferential payment … Continue reading

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What Is “Reverse Vesting”

“Reverse Vesting” is an expression used to describe a situation in which an employee or independent contractor or consultant receives stock subject to repurchase by the company at an at-cost purchase price, which repurchase right lapses over the vesting period.  … Continue reading

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