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.

Creations of the mind that are legally protected, including patents, trademarks, copyrights, and trade secrets. IP is a critical intangible asset category for technology and innovation-driven firms and can be licensed, sold, or used as collateral for financing.

A comprehensive document prepared by the seller's advisors in an M&A sale process that provides prospective buyers with detailed information about the target business, including its history, products and services, market position, financial performance, management team, growth opportunities, and key risks. The IM is distributed to shortlisted parties after they have signed a non-disclosure agreement and is designed to enable buyers to form a preliminary valuation and submit indicative offers.

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.

The comprehensive investigation and analysis of a business prior to an investment, acquisition, or partnership. Due diligence covers financials, legal, commercial, technical, and operational areas, and increasingly includes assessment of intangible assets and productivity metrics.