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Tag-Along Rights / Rights of Co-Sale: A minority shareholder protection affording the right to include their shares in any sale of control and at the offered price.
Takedown Schedule: A takedown schedule means the timing and size of the capital contributions from the limited partners of a venture fund.
Target Multiples : The desired return on investment of private investors in early stage companies, defined in a multiple of the original investment.
Tax-free reorganizations: Types of business combinations in which shareholders do not incur tax liabilities. There are four types-A, B, C, and D reorganizations. They differ in various ways in the amount of stock/cash that can be offered. See Internal Revenue Code Section 368.
Tender offer: An offer to purchase stock made directly to the shareholders. One of the more common ways hostile takeovers are implemented.
Term Sheet: Term sheet for convertible promissory notes
Time Value of Money: The basic principle that money can earn interest, therefore something that is worth $1 today will be worth more in the future if invested. This is also referred to as future value.
Trade sale: The sale of the equity share of a portfolio company to another company.
Tranche: Funds flowing from investors to a company that represent a partial round or an "early close." Subsequent funds of the single round are generally under the same terms and conditions as the first tranche （or early close）, however, those funding the early tranches may recive bonus warrant coverage, in consideration of the additional risk. （a French word meaning a slice or cutting）
Treasury Stock: Stock issued by a company but later reacquired. It may be held in the company's treasury indefinitely, reissued to the public, or retired. Treasury stock receives no dividends and does not carry voting power while held by the company.
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UBTI: UBTI, Unrelated Business Taxable Income, is a concern to tax exempt investors in a hedge fund because the receipt of UBTI requires the tax exempt entity to file a tax return that it would not otherwise have to file and pay taxes on income that would otherwise be exempt, at the corporate rate. UBTI includes most business operations income and does not include interest, dividends and gains from the sale or exchange of capital assets. Hedge Funds trade their own securities and therefor the tax exempt investor's share of such income of the hedge fund is not UBTI and not subject to federal income tax. However, hedge funds may subject tax exempt entities to UBTI under certain circumstances where the hedge fund is borrowing or purchasing securities on margin. Such transactions may subject the tax exempt to UBTI tax.
ULPA: Uniform Limited Partnership Act, see also the RULPA, Revised Uniform Limited Partnership Act U.L.P.A. § 101 et seq. （1976）, as amended in 1985 （R.U.L.P.A.）.
Upper quartile: The point at which 25% of all returns in a group are greater and 75% are lower.
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Venture Capital Financing: An investment in a startup business that is perceived to have excellent growth prospects but does not have access to capital markets. Type of financing sought by early-stage companies seeking to grow rapidly.
Venture Capitalist: A financial institution specializing in the provision of equity and other forms of long-term capital to enterprises, usually to firms with a limited track record but with the expectation of substantial growth. The venture capitalist may provide both funding and varying degrees of managerial and technical expertise.
Vesting schedules: Timetables for stock grants and options mandating that entrepreneurs earn （vest） their equity stakes over a number of years, rather than upon conversion of the stock options. This guarantees to investors and the market that the entrepreneurs will stick around, rather than converting and cashing in their shares.
Vintage Year: The year in which the venture firm began making investments. Often, those funds with "vintage years" at the top of the market will have lower than average returns because portfolio company valuations were high, e.g an Internet Fund started in vintage year 1998.
Voluntary Redemption: is the right of a company to repurchase some or all of an investors' outstanding shares at a stated price at a given time in the future. The purchase price is usually the Issue Price, increased by Cumulative Dividends.
Voting Right: The common stockholders' right to vote their stock in the affairs of the company. Preferred stock usually has the right to vote when preferred dividends are in default for a specified amount of time. The right to vote may be delegated by the stockholder to another person.
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Warrant: A type of security that entitles the holder to buy a proportionate amount of common stock or preferred stock at a specified price for a period of years. Warrants are usually issued together with a loan, a bond or preferred stock ——and act as sweeteners, to enhance the marketability of the accompanying securities. They are also known as stock-purchase warrants and subscription warrants.
Wash-Out Round: A financing round whereby previous investors, the founders, and management suffer significant dilution. Usually as a result of a washout round, the new investor gains majority ownership and control of the company. Also known as burn-out or cram-down rounds.
Weighted Average Antidilution: The investor's conversion price is reduced, and thus the number of common shares received on conversion increased, in the case of a down round; it takes into account both: （a） the reduced price and, （b） how many shares （or rights） are issued in the dilutive financing. See Broad-Based Ratchet and Narrow-Based Ratchet definitions.
Williams Act of 1968: An amendment of the Securities and Exchange Act of 1934 that regulates tender offers and other takeover related actions such as larger share purchases.
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