The obligation to co-sell (Drag-Along) enables the majority shareholders to sell their shares to a third party and at the same time to force minority shareholders to co-sell their shares.
The data room is (mostly) a secure place where investors or potential buyser can review confidential data and information about the target company. The data room is set up before a due diligence starts. Next to client contracts, ip contracts also the shareholder agreements and investment agreements of previous financing rounds are crucial information to the investor / buyer.
Borrowed capital is usually granted by banks and must be repaid in full during the term in certain installments or at final maturity. In addition, interest is payable on the amount granted. Interest is based on the risk borne by the lender on the one hand and on the term of the loan on the other. A new form of debt financing, especially in the venture sector, is the so-called venture debt.
Dilution occurs when new shares are issued as part of a capital increase. The percentage share of the existing shareholders then decreases. This is a percentage or proportional dilution. In addition, there is a price-based dilution, which occurs when a new financing round takes place at a price below the previous price. In this case, the value of the shares also decreases. (Protection: Anti-dilution)
A Down Round occurs when the valuation of a company within a financing round is set lower then in the previous financing round.