Board of Directors

A legally binding contract between a company's shareholders that governs their rights, obligations, and the rules for key decisions including share transfers, board composition, dividend policy, and exit mechanisms. Essential governance infrastructure for investor-backed companies.

A provision that gives minority shareholders the right to join a transaction when a majority shareholder sells their stake, ensuring they can exit on the same terms and conditions. Tag-along rights protect minority investors from being left in a company after a controlling interest changes hands.

A group of investors who co-invest together in a single funding round, typically organised by a lead investor. Syndicates spread risk across multiple investors and allow companies to access a broader range of expertise, networks, and follow-on capital.

A provision that allows majority shareholders (or lead investors) to force minority shareholders to join in the sale of the company on the same terms. Drag-along rights prevent minority holders from blocking an exit that the majority supports.

A comprehensive measure of investment performance that combines share price appreciation and dividends over a given period. TSR is a key metric for assessing whether management's investment in both tangible and intangible assets is translating into value creation for shareholders.

The vulnerability a company faces when critical knowledge, relationships, or capabilities are concentrated in a small number of individuals. Key person risk is a major factor in intangible asset valuation and due diligence, particularly for professional services firms, early-stage companies, and fund management teams.

A formal written assessment, typically prepared by an independent investment bank or valuation firm, evaluating whether the financial terms of a proposed transaction are fair to a company's shareholders from a financial point of view. Fairness opinions are standard practice in M&A transactions and are relied upon by boards of directors to discharge their fiduciary duties.

The investor who takes the primary role in a financing round, typically investing the largest amount, setting the terms, negotiating the term sheet, and conducting due diligence. The lead investor often takes a board seat and serves as the main point of contact for the company.

What is the Cap Table and why does it matter?

A cap table (capitalisation table) lists all of a company's shares, options, and convertible securities, showing who owns what percentage of the company — it is essential for fundraising, dilution analysis, and exit planning.

What is a co-sale right (tag-along right for shareholders)?

Co-sale rights allow shareholders to participate in a sale of the company on the same terms negotiated by majority shareholders, preventing discrimination against minorities.

What are drag-along rights and when are they exercised?

Drag-along rights allow majority shareholders (often preferred investors) to force minority shareholders (usually founders) to sell their shares in an acquisition, preventing holdouts from blocking deals.