Non-Disclosure Agreement (NDA)

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 contractual arrangement in which one party agrees not to engage in competitive activity for a specified period and within a defined geographic area. Non-compete agreements are recognised as identifiable intangible assets in purchase price allocations and serve to protect acquired customer relationships, trade secrets, and human capital.

A financing instrument developed by Y Combinator that provides investors with the right to receive equity at a future priced round, subject to a valuation cap and/or discount. SAFEs are simpler than convertible notes, carry no interest, and have no maturity date.

Confidential business information that provides a competitive advantage, including formulas, processes, methods, customer lists, and supplier terms. Unlike patents, trade secrets are not publicly disclosed and are protected through confidentiality agreements and security measures rather than registration.

A situation in which one party in a transaction possesses more or better information than the other, creating an imbalance that can affect pricing and deal outcomes. Information asymmetry is particularly acute in intangible-heavy businesses, where the true value of assets such as proprietary data, know-how, and relationships is difficult for external parties to assess.

Heads of terms (also called a letter of intent or memorandum of understanding) is the short document that records the main commercial terms a buyer and seller have agreed in principle before formal contracts are drafted. It typically covers the headline price, the deal structure (a share sale or an asset sale), any earn-out, the conditions to completion, and an exclusivity period during which the seller agrees not to talk to other buyers.

A systematic review of a company's intellectual property portfolio — including patents, trademarks, copyrights, trade secrets, domain names, and licences — to assess ownership, validity, enforceability, freedom to operate, and commercial relevance. IP audits are essential in M&A due diligence, technology licensing negotiations, and litigation preparation.

A teaser is the short, deliberately anonymous document a seller's adviser uses to test the market for a business without revealing its identity. Usually one or two pages, it summarises the sector, size, financial highlights and investment rationale in enough detail to interest a buyer but not enough to identify the company.

IP Valuation: How to Value Intellectual Property

What is an information memorandum?

An information memorandum is the detailed document a seller's adviser prepares to market a business to buyers under NDA — financials, customers, team, growth and the assets behind the price.

What is an exclusivity period in M&A and how does it differ from a term sheet no-shop?

An M&A exclusivity period prevents the seller from soliciting or engaging with other buyers, typically lasting 30-90 days from LOI signature, longer than VC no-shop clauses.

What is AI washing?

AI washing is the practice of exaggerating or fabricating a company's use of artificial intelligence to attract investors, customers, or higher valuations — similar to greenwashing in ESG.