| venture capital (VC) | Financing for new, often high-risk ventures.
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| registration statement | A statement filed with the SEC that discloses all material information concerning the corporation making a public offering.
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| Regulation A | An SEC regulation that exempts public issues of less than $5 million from most registration requirements.
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| prospectus | A legal document describing details of the issuing corporation and the proposed offering to potential investors.
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| red herring | A preliminary prospectus distributed to prospective investors in a new issue of securities.
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| tombstone | An advertisement announcing a public offering.
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| general cash offer | An issue of securities offered for sale to the general public on a cash basis.
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| rights offer | A public issue of securities in which securities are first offered to existing shareholders. Also called a rights offering.
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| initial public offering | A company's first equity issue made available to the public. Also called an unseasoned new issue or an IPO.
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| seasoned equity offering (SEO) | A new equity issue of securities by a company that has previously issued securities to the public.
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| underwriters | Investment firms that act as intermediaries between a company selling securities and the investing public.
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| syndicate | A group of underwriters formed to share the risk and to help sell an issue.
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| gross spread | Compensation to the underwriter, determined by the difference between the underwriter's buying price and offering price.
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| firm commitment underwriting | The type of underwriting in which the underwriter buys the entire issue, assuming full financial responsibility for any unsold shares.
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| best efforts underwriting | The type of underwriting in which the underwriter sells as much of the issue as possible, but can return any unsold shares to the issuer without financial responsibility.
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| Dutch auction underwriting | The type of underwriting in which the offer price is set based on competitive bidding by investors. Also known as a uniform price auction.
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| Green Shoe provision | A contract provision giving the underwriter the option to purchase additional shares from the issuer at the offering price. Also called the overallotment option.
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| lockup agreement | The part of the underwriting contract that specifies how long insiders must wait after an IPO before they can sell stock.
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| ex-rights date | The beginning of the period when stock is sold without a recently declared right, normally two trading days before the holder-of-record date.
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| holder-of-record date | The date on which existing shareholders on company records are designated as the recipients of stock rights. Also, the date of record.
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| standby underwriting | The type of underwriting in which the underwriter agrees to purchase the unsubscribed portion of the issue.
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| standby fee | An amount paid to an underwriter participating in a standby underwriting agreement.
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| oversubscription privilege | A privilege that allows shareholders to purchase unsubscribed shares in a rights offering at the subscription price.
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| dilution | Loss in existing shareholders' value, in terms of either ownership, market value, book value, or EPS.
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| term loans | Direct business loans of, typically, one to five years.
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| private placements | Loans, usually long-term in nature, provided directly by a limited number of investors.
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| shelf registration | Registration permitted by SEC Rule 415, which allows a company to register all issues it expects to sell within two years at one time, with subsequent sales at any time within those two years.
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