A program or scheme that provides support for early stage businesses and start-ups through mentoring, training and sometimes investment.

Advanced Subscription Agreement (ASA)

A legal document that governs an investment for equity where the investor pays in advance for shares that will be issued at a later date (typically at a discount to the price per share in the next funding round). 


Typically a high net worth individual who invests relatively small amounts of capital in start-ups at pre-seed or seed stage.

Anti-dilution clause

A legal provision designed to protect an investor’s equity stake from being diluted (usually in the event of a further equity fundraising at a lower price). 

Articles of association (Articles)

The constitutional document of a company containing detailed provisions about how shares are to be dealt with and what rights attach to the shares alongside addressing the day-to-day practicalities of running the Company. Unlike the shareholders’ agreement, the articles need to be publicly filed at Companies House.



Start-ups self-financing and thereby avoiding the need to raise capital in their early stages.

Bridge Facility

An interim financial facility often in place for a short term until further capital can be raised (e.g. a loan for a start-up pending its next round of equity financing).


Our BScale team is drawn from across our business and includes senior lawyers from each of our core practice areas with a particular focus on supporting high growth businesses in the technology sector.

BScale clients will also have the benefit of our extensive contacts and deep relationships with the key players and institutional investors operating within our core sectors.



Capitalisation Table (Cap Table)

A table that sets out the equity capitalisation of a company (i.e. listing all the shareholders and their respective shareholdings in a company).

Compulsory Transfer

A set of circumstances in which a shareholder will have to transfer their shares (e.g. when an employee leaves the company).

Confidentiality Agreement (aka Non-Disclosure Agreement / NDA)

A preliminary agreement entered into between parties to protect the confidentiality of information shared between them.

Control Rights

Rights that give the shareholder to exert control over the company (e.g. voting rights, rights to appoint the majority of directors and the right for shareholders to veto certain actions).

Convertible Debt

Debt that can be converted into shares in the company. The debt typically converts to shares at a later valuation allowing companies to raise money in their early stages without having to arrive at a valuation.  



Down round

An equity fundraising round in which the company is valued at a lower value per share than in previous rounds.


A right for a majority shareholder(s) to force minority shareholders to sell their stake in a company.

Due Diligence

A process through which a potential investor can investigate the business (legally and financially) to understand the business and validate (or not) their investment decision.




Enterprise Investment Scheme – an important form of tax relief available for investors that invest in qualifying companies, allowing those company to raise up to £5m each year and £12m over its lifetime.

EMI Options

Enterprise Management Incentive options offer tax-advantaged and flexible incentives for companies that meet the qualifying criteria.

Equity Financing

Raising capital by way of issuing shares to investors. 

Exercise (Strike) Price

The amount an optionholder must pay to exercise their share options.


The sale or listing of a company. Usually the point at which the investors see the return on their investment.



Fully Diluted

Means the shareholding position taking account of all outstanding options, warrants, convertible debt and any other instruments that can be converted into shares. 


Information Rights

Rights given to an investor which put the company under an obligation to share certain financial and business information.

Initial Public Offer (IPO)

The process through which the company obtains its first listing or quotation of its shares on a securities exchange.


Lead Investor

An investor that leads the negotiation of investment terms and who typically invests the most capital in the round. 


An employee that leaves their employment with a company. 

Liquidation Preference

The order in which shareholder get paid in the event of liquidation event (sale, winding up etc.). If an investor has a liquidation preference on a liquidation event, that investor will receive its money or a multiple of its money back before anyone else is paid out. 

If the liquidation preference is ‘participating’ the investor receives its preference first AND shares pro rata in the remaining proceeds.

If the liquidation preference is ‘non-participating’ after the investor has received its preference amount, managers / founder get to ‘catch-up’. Once parity is reached the proceeds are distributed pro rata.


Non-Disclosure Agreement (aka NDA / Confidentiality Agreement)

A preliminary agreement entered into between parties to protect the confidentiality of information shared between them.


Option Pool

An allocation of shares available for issue to employees and directors as part of their incentive arrangements. 

Ordinary Shares

A form of shares in a company that typically do not have any preferential rights such as voting or rights to dividends.


Pari Passu

A latin phrase used in legal documents meaning equal treatment e.g. that holders of one class of share shall be treated on the same basis as other holders of that class of share. 

Post-money Valuation

The value of the company after the investment (calculated by adding the amount raised in the current round to the pre-money valuation). 

Pre-emption Rights

A shareholder’s right to subscribe for their pro rata percentage of any new share issues (i.e., the right to “follow your money” to avoid dilution). 

Preference Shares

A form of shares which rank ahead of other shares in respect of certain rights e.g. right to dividends or capital but typically with limited voting rights.

Pre-money Valuation

The value of the company prior to the investment (calculated by multiplying the fully diluted number of shares in the capital of the company by the price per share agreed for the equity fundraising).

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Seed Enterprise Investment Scheme – an important form of tax relief available for investors that invest in qualifying companies, allowing those company to raise up to £150,000.

Seed Round

An initial fundraising round typically when the business is in the development phase.

Series A Round

The second round of fundraising for start-ups typically when some form of venture capital funding may be provided.

Series B Round

The third round of fundraising for start-ups usually geared towards growing an established start-up.

Series C Round

The fourth round of fundraising for start-ups where larger investors may invest.

Shareholders' Agreement (aka Subscription and Shareholders' agreement / Investment Agreement)

A contract between the shareholders of a company that defines the rights and obligations of the shareholders and governs their relationship between one another and the Company (unlike the articles, the shareholders’ agreement does not need to be publically filed at Companies House).

Share options

A right to purchase shares in a company typically offered to the company’s employees and directors as part of their incentive arrangements.




A right for a minority shareholder to sell their shares alongside a majority shareholder if the majority shareholder sells a set percentage of their stake to a third party. 

Term sheet

A document setting out key or material terms of a potential transaction.



A start-up company valued at over $1bn. 

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Venture Capitalist

A private equity investor that provides capital to high growth potential companies (usually at the point that the company is looking to commercialise their idea).

Venture debt

A type of loan offered by specialised banks and alternative lenders that is designed specifically for early-stage, high-growth companies with venture capital backing. Venture loans are often combined with warrants.


The conditions that need to be satisfied before share options are capable of exercise. Those conditions could be as simple as the passage of time or the achievement of performance criteria.

In the context of shares that are already in issue, the concept of reverse vesting applies - the founders shares may be subject to compulsory transfer (often at a discount) until such time as the shares have vested. 




A right to purchase shares at a later date at a set price.