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Understanding Equity Basics

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What is an Option Pool?

When a company is looking to attract and retain top talent, one of the tools that can be used is an option pool. An option pool is a type of compensation offering employees options in stocks or other equity-like instruments. This practice has grown increasingly popular, as it can reward both the employer and employee…

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How Does Cliff Vesting Work?

Cliff vesting has become an increasingly popular way of providing employee benefits to those willing to commit to a company for a set amount of time. This type of vesting can be used for retirement plans, stock options, and other types of benefits that require employees to remain with the company for a specific period…

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Issuing Advisory Shares: Strategic Equity for Your Business

Are you considering offering advisory shares as part of your company’s equity structure? Advisory shares are a unique type of equity that allows businesses to grant a form of non-voting stock to advisors or consultants, providing them with the incentive of equity ownership without giving away control. This guide will explore the nature of advisory…

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What Are Incentive Stock Options vs. Non-Qualified Stock Options?

Employee compensation is a critical factor in any company’s success, and one of the most popular forms of compensation today are stock options. Incentive Stock Options (ISOs) and Non-Qualified Stock Options (NSOs) are two types of stock options that offer employees the chance to purchase company stock at a discounted price. Knowing the differences between…

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What Is a Safe Note vs. a Convertible Note?

Raising capital is an essential part of the startup world. While traditional equity investments are often used, two other popular instruments that have become increasingly common are safe and convertible notes. These two forms of investment offer companies and investors different advantages and disadvantages, so it is vital to understand their differences before deciding. In…

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What is Stock Dilution?

Stock dilution is an essential part of equity investing that can benefit businesses. It is increasing the number of shares in a company, either through issuing new shares or by converting assets into stock. While this practice can be useful for raising capital, giving employees equity-based compensation, and increasing voting control, it also has potential…

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Common v. Preferred Stock

When investing in stocks, there are two primary types of inventories to consider: common and preferred. While both can be used as an investment, they have distinct advantages and disadvantages that must be considered before making a decision. This article will explore the differences between standard and preferred stock, outlining their benefits and drawbacks for…

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