Startup Glossary: Letter "P"

Participating Preferred Stock is a class of equity that allows investors to receive their liquidation preference first, and then participate pro-rata in remaining common stock distributions.

Participation Rights allow preferred stock investors to share in common stock distributions after receiving their liquidation preference.

A Pay-to-Play Provision is a contract clause requiring investors to participate pro-rata in future down rounds, or face losing their preferred rights and protections.

A Proprietary Information and Inventions Agreement (PIIA) is a legal document signed by founders, employees, and contractors that automatically assigns all intellectual property (IP) created during employment to the company.

A Pitch Deck is a short, highly structured slide presentation used by founders to pitch their startup to prospective investors.

A Pivot is a fundamental shift in a startup's business strategy, product direction, target market, or monetization model based on feedback and market validation.

Post-Money Valuation is the calculated value of a startup immediately after a funding round is completed.

The Post-Termination Exercise Period (PTEP) is the timeframe during which a departing employee must purchase (exercise) their vested stock options before they expire.

Pre-Money Valuation is the negotiated, estimated value of a startup before it receives a new round of investment.

Pre-Seed funding is the earliest stage of venture financing, typically occurring before a startup has a fully developed product or proven product-market fit.

Preemptive Rights give existing shareholders the right to purchase additional shares in subsequent stock offerings before they are made available to the public or new investors.

Preferred Returns (also known as hurdle rates) are the minimum profits that must be distributed to investors before fund managers can collect performance fees.

Preferred Stock is a class of equity ownership in a startup that carries special rights, preferences, and privileges above common stock, typically issued to venture capital investors.

A Priced Round is a funding round where investors purchase equity at a specific, negotiated per-share price, establishing a formal valuation for the startup.

Pro-Rata Rights give investors the legal right to participate in future funding rounds to maintain their ownership percentage in the startup.

A Product Roadmap is a strategic document that outlines the vision, priorities, and direction of a startup's product over time.

Product-Led Expansion is a strategy where product usage and self-service features drive account upgrades and revenue expansion organically.

Product-Led Growth (PLG) is a business model where product usage, adoption, and value are the primary drivers of customer acquisition, retention, and expansion.

Product-Market Fit (PMF) is the stage where a startup has built a product that successfully satisfies a strong market demand in a scalable way.

Proprietary Deal Flow represents investment opportunities sourced exclusively by a venture firm before the startup pitches to other investors.

A Public Offering is the offering of a company's shares to the public on a stock exchange, transforming it into a publicly traded corporation.