Startup Glossary

The Payout Ratio is a financial metric showing the proportion of earnings a company pays to its shareholders in the form of dividends, expressed as a percentage of the company`s total earnings.

Peer Review is the evaluation of work by one or more people of similar competence to the producers of the work, which constitutes a form of self-regulation by qualified members of a profession.

A Partnership refers to a business structure where two or more individuals manage and operate a business in accordance with the terms set out in the Partnership Agreement.

Partnership Marketing involves collaborations between businesses to enhance their market visibility, share resources, and capitalize on each other`s strengths to achieve mutual benefits.

Passive Income is earnings derived from a rental property, limited partnership, or other enterprise in which a person is not actively involved.

Pari-passu is a financing term indicating that all investors or creditors are treated equally in a certain aspect of the deal.

Participating Preferred Stock is a type of equity that allows holders to receive dividends equal to the common stockholders on an as-converted basis, after receiving their preferred dividends.

A Participation Cap limits the amount investors can receive in liquidation preferences, often used in preferred stock agreements to balance investor and founder interests.

Participation Rights allow investors to retain their proportionate ownership in a company by participating in subsequent funding rounds.

A Passive Investor is an individual or entity that invests in a company but does not take an active role in management or daily operations, typically in exchange for regular income or dividends.

A Patent is a form of intellectual property that gives its owner the legal right to exclude others from making, using, or selling an invention for a limited period of years.

Patent Pending is a legal status indicating that a patent application has been filed with the patent office but has not yet been granted or rejected, offering some protection against copying.

A Patent Portfolio is the collection of all the patents owned by a business or individual, representing a significant asset in protecting intellectual property.

A Pay-to-Play Provision requires existing investors to participate in future funding rounds to avoid dilution of their equity stake.

The Payback Period is the time required for an investment to generate cash flow or profits equivalent to its cost, used to evaluate the feasibility of a project.

A Payment Gateway is a merchant service provided by an e-commerce application service provider that authorizes credit card or direct payments processing for e-businesses, online retailers, etc.

Payment Terms are the conditions under which a seller will complete a sale, typically specifying the period allowed to a buyer to pay off the amount due.

The Payout Period refers to the time frame in which an investment returns all its original capital back to the investor, also known as the payback period.

Peer-to-Peer (P2P) Lending is a method of debt financing that enables individuals to borrow and lend money without the use of an official financial institution as an intermediary.

Peer-to-Peer Funding is a method of debt financing that enables individuals to lend and borrow money directly from each other, bypassing traditional financial institutions.