Issue link: https://htpgraphics.uberflip.com/i/246991
Glossary of Common Terms Section 10 should have a greater share of the equity on day one and the Investor remains to be convinced but wishes to incentivise the management. Seed or Seed Corn Funding – This is the money sought to carry out and complete the seed stage activities. The amount can range from modest sums up to approximately £250,000, depending upon the nature of the business idea and its underlying IP. Seed Stage – The stage at which a business idea is being translated into working proposals. In practice this means the production of a business model and supporting plan, the development of a prototype, the initiation of relevant IP searches and registrations and the initial market research activities to validate the business proposition. Shareholders' Agreement – This is an agreement entered into by the shareholders of the company to govern their relationship (ie the rights and obligations of each party) and the operation of the company. It may also set out the terms on which each member may be applying (or subscribing) for shares in the company. Shareholders' Agreements may also be referred to as "Investment Agreements" or "Subscription Agreements". Stakeholders – Those individuals or organisations who are not shareholders but who are likely to be affected by the company's activities and objects, eg banker, loan providers, customers, creditors, debtors, industry and/or social groups. Statutory Books – This contains a record of the shareholders and directors of the company, directors' interests in the company's shares, charges over the company's assets and minutes of meetings. It may be a book or a looseleaf folder and may comprise one or more of them. Tag Along Rights – Rights attaching to a minority shareholder requiring the majority to ensure that any offer for the majority shareholding is extended on the same terms to the minority. This prevents a small minority from being left out of an arrangement or deal. These are also sometimes known as "come along" rights. Trade Marks – Any sign capable of being represented graphically and may consists of words, designs, letters, numerals, colours or even smells or shapes. Trade Marks exist in the UK as both a registered and unregistered IP. Registration offers a cost effective and easier way to protect brand image. Venture Capitalist or VC – In simple terms, an institution which provides equity or risk capital to businesses with a view to making a large capital return. 51