Glossary of Terms on The Grid

The financial field dedicated to buying and selling businesses

Employee Ownership Centers (also called Centers of Employee Ownership) are state-based centers that provide technical assistance, and advocacy for EO, and belong to a national network called EOX (Employee Ownership Expansion Network)

A unionized worker co-op is a business governed and owned by its workers with the distinctive features that it uses the collective bargaining process to determine pay, benefits, etc. for its workers, and is connected to the larger union movement.

We provide leadership on food, agriculture, natural resources, rural development, nutrition, and related issues based on public policy, the best available science, and effective management.

A convertible note is a temporary debt tool enabling investors to convert their loan into company equity. It postpones the valuation of the company until later rounds, like Series A, when more information is accessible.

Venture capital (VC) is a form of private equity and a type of financing for startup companies and small businesses with long-term growth potential.

Due diligence in M&A is the thorough investigation and verification of a target company's financial, operational, legal, and strategic aspects to assess risks and opportunities before a transaction.

A cash flow statement provides a detailed overview of how cash moves in and out of a company, crucial for assessing its financial health and operational efficiency. The CFS focuses on cash flow from operating, investing, and financing activities.

A warrant is a financial instrument that gives the holder the right, but not the obligation, to purchase a specific number of shares at a predetermined price (strike price) by a certain time (exercise date).

Reg D crowdfunding, under Regulation D of the SEC, allows companies to raise funds from accredited investors through private placements without registering with the SEC. Favored for its flexibility and lack of ceiling on funds raised, making it popular for private placements

A Special Purpose Acquisition Company (SPAC), also known as a blank check company, is formed solely to raise funds through an initial public offering (IPO) for the purpose of acquiring an existing company.

The Valuation Multiples approach, also known as multiples analysis, is a method in valuation that compares similar companies using standardized financial metrics. It assumes that comparable firms should have similar ratios, like P/E ratios, reflecting operational similarities.

A SEAL is a unique financing model for early-stage software and software-enabled companies. SEALs do not involve equity ownership, fixed repayment schedules, or personal guarantees. Instead, investors provide upfront capital in exchange for a percentage of founder earnings

A "does it make sense?" analysis of a business sale. Feasibility studies can include multiple types of analysis, typically including at least financial (more quantitative) and operational (more qualitative) analysis.

An IPO is the process by which a private company offers its shares to the public for the first time. The process involves meeting regulatory requirements, hiring investment banks to manage the offering, setting the IPO price, and issuing shares.

A Limited Cooperative Association (LCA) is an independent, unincorporated group of individuals united to pursue mutual interests through a jointly owned enterprise primarily managed by its members.

Stock appreciation rights (SARs) give the right holder a bonus based on the company's stock price increase. Essentially, it's a way to benefit from a rising stock price without directly buying the stock.

Tail coverage, extended reporting period or tail insurance, is a crucial addition to claims-made business insurance policies. It provides protection for claims made after a policy expires, covering incidents that occurred during the policy period but were reported afterward.

Junior debt, also known as subordinated debt, refers to bonds or loans that have a lower priority for repayment compared to senior debt in case of default. This type of debt lacks collateral and carries higher risk, leading to higher interest rates.

Liquidity refers to the efficiency or ease with which an asset or security can be converted into cash without affecting its market price. The most liquid asset of all is cash itself. This also includes how fast a business sale will result in cash to the selling owner.

A tuck-in acquisition occurs when a larger company integrates a smaller company entirely, incorporating its technology, intellectual property, and operational setup into its own operations. These acquisitions aim to strengthen the acquirer's market position or improve reosurces.

Steward-ownership is an alternative corporate structure that prioritizes a company's long-term mission over short-term profits by enshrining principles of self-determination and purpose-orientation.

In the event of an acquisition, it is typical for acquired assets to be stepped-up to their FMV. The resultant increase in depreciation and amortization has the potential to reduce taxes for the acquirer, depending on how the business combination has been structured.

The CHIPS and Science Act, signed into law in August 2022, allocates $280 billion to strengthen US semiconductor capacity, support R&D, establish high-tech hubs, and promote a more diverse STEM workforce.

A family office is a private wealth management advisory firm that serves ultra-high-net-worth individuals (HNWI). Family offices offer a total solution to managing the financial and investment needs of an affluent individual or family.

The Doughnut is two rings: a social foundation, meeting essentials for all people, and an ecological ceiling, to ensure that humanity does not overshoot the planetary boundaries of human habitability. Between these two is a doughnut that is ecologically safe and socially just.

changes in the ownership structure of user owned and controlled organizations (co-ops) from a mutual to a for-profit, proprietary organization

QSBS is a tax provision that allows sellers to exclude a substantial portion of their capital gains from federal tax when selling C-corporation stock.

Capital Accounts are distinct accounts that track the ownership value held by individual employees.

Private equity refers to capital investments made in companies or assets that are not publicly traded. PE investments are typically longer term and less liquid compared to mutual funds.