Glossary of Terms on The Grid

The right of redemption allows homeowners who have defaulted on their mortgages to reclaim their property by paying the overdue amount, including interest and penalties, either before or sometimes after a foreclosure sale.

Microfinance, also called microcredit​, is a type of banking service provided to low-income individuals or groups who otherwise wouldn't have access to financial services. Microloans can range from as small as $50 to under $50,000.

Specific forms of communication to employee owners by sponsoring companies that may be organized by a Communications Committee, and which often are used to educate employees about the rights and benefits of ownership

Employee owned companies which are 100% owned by the employees, whether through an ESOP, EOT or worker co-op.

An accountant is usually certified in their jurisdiction, using titles such as “Certified Public Accountant”, and qualified to advise on tax laws, analyze financial statements, and perform audits.

409A plans are a type of non-qualified deferred compensation plan for compensation that has been earned by an employee but not yet received from their employer. Because the ownership of the compensation—which may be monetary or otherwise—has not been transferred to the employee, it is not yet part of the employee's earned income and is not counted as taxable income

When starting a business, the founding owner(s) often fund the business before it is bringing in enough money to cover its expenses. They may do this by working unpaid hours and/or using personal money to purchase supplies, uniforms, printing, postage, etc.

A PEO is a company which offers employment as a service, with the PEO typically becoming "employer of record" for one or more of a company's employees for the sake of shared services such as payroll, benefits, etc.

Cooperatives provide education and training for their members, elected representatives, managers, and employees so they can contribute effectively to the development of their co-operatives. They inform the general public - particularly young people and opinion leaders - about the nature and benefits of co-operation.

Members contribute equitably to, and democratically control, the capital of their cooperative. At least part of that capital is usually the common property of the cooperative. Members usually receive limited compensation, if any, on capital subscribed as a condition of membership. Members allocate surpluses for any or all of the following purposes: developing their cooperative, possibly by setting up reserves, part of which at least would be indivisible; benefiting members in proportion to their transactions with the cooperative; and supporting other activities approved by the membership.

Cooperatives are democratic organisations controlled by their members, who actively participate in setting their policies and making decisions. Men and women serving as elected representatives are accountable to the membership. In primary cooperatives members have equal voting rights (one member, one vote) and cooperatives at other levels are also organised in a democratic manner.

Cooperatives are autonomous, self-help organisations controlled by their members. If they enter into agreements with other organisations, including governments, or raise capital from external sources, they do so on terms that ensure democratic control by their members and maintain their cooperative autonomy.

Unique considerations for creating EO legal documents such as an EOT Trust Agreement or worker co-op bylaws

A community based investment vehicle where non-accredited investors can pool capital for the sake of making investments in things like real estate, or other small businesses which align with the values of the investment co-op members

the aggregate market value of a company represented in a dollar amount

Mezzanine debt is the middle layer of capital that sits subordinated to senior debt and above equity on the balance sheet. This type of capital is usually not secured by assets and is lent based on a company's ability to repay with cash flows.

A US governmental agency whose mission is to protecting investors, maintaining fair, orderly, and efficient markets, and facilitating capital formation.

A quality of earnings report is a routine step in the due diligence process for private acquisitions. The report assesses how a company accumulates its revenues – such as cash or non-cash, recurring or nonrecurring.

Diversity: The representation of different groups in an enterprise. Equity: giving people what they need based on their unique circumstances. Inclusion: being seen, understood, and valued as an individual, with a unique identity, skills, and experience

The threshold rate of return is the minimum return that an investor can expect to achieve when investing in a project. It is influenced by the risk of the investment, the liquidity of the investment, and inflation

Equity is found on the Balance Sheet and equals Assets minus Liabilities. In other words, it is the difference between what we own and what we owe. It can also be considered as net value, or the amount that would be left over if a company liquidated (i.e. turned into cash) all its assets and repaid all its debts.

In an internal capital account cooperative, the co-op’s net worth is reflected in a system of internal capital accounts. Each member has an individual capital account (ICA) to keep track of their portion of the co-op’s net worth and reflect the value of the member’s relative equity in the co-op

The Employee Impact Index™ illuminates company top opportunities to leverage changes in the operational and managerial practices that have known correlations to improved human capital and financial KPIs. Index scores provide the business with an actionable roadmap to success.

S Corporation ESOPs must test for section 409(p) which states an S Corp ESOP cannot allocate shares to disqualified persons during any nonallocation year.

A participation loan is an agreement where multiple lenders finance a single loan. The original lender keeps control of the loan but sells shares of it to other banks.

In accounting, goodwill is an intangible asset. The concept of goodwill comes into play when a company looking to acquire another company is willing to pay a price premium over the fair market value of the company’s net assets.

A bolt-on acquisition is a transaction in which a larger company acquires a smaller company that offers complementary services, products, or geographical advantages. PE firms often use bolt-on acquisitions as a strategy to grow their portfolio companies and increase their value.

An impediment to the sale of a business to the employees, e.g., selling owner on a very short timeline, highly volatile financial history, etc.

A sub-plan created as part of the overarching succession plan which specifically defines things like key stakeholders to be notified of the succession plan, and sample copy and/or graphics for how the succession plan will be communicated.

A blended finance strategy which takes account of some unique characteristics of most EO companies, e.g., not utilizing personal guarantees due to broad-based ownership