Pay to play

Pay to play

A provision in venture financing documents that states that if one of the venture investors declines to participate in a later financing round up to its pro rata ownership share of the company, it will forfeit certain of the beneficial terms of its investment, such as anti-dilution protection, pre-emptive rights, etc.

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Part of Speech: noun
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Industry/Domain: Financial services
Category: Private equity
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Related terms

pay to play

Financial services; Private equity

A provision in venture financing documents that states that if one of the venture investors declines to participate in a later financing round up to its pro rata ownership share ...

Pay-to-play

Financial services; General Finance

Attempts by municipal bond underwriting businesses to gain influence with political officials who decide which underwriters are awarded the municipality's business.

Pay to Play

Financial services;

A clause in a financing agreement whereby any investor that does not participate in a future round agrees to suffer significant dilution compared to other investors. The most ...

leveraged recapitalisation

Financial services; Private equity

Transaction in which a company borrows a large sum of money and distributes it to its shareholders.

leveraged buy-out fund (LBO Fund)

Financial services; Private equity

An investment fund or company focusing on financing leveraged buyouts.

information rights

Financial services; Private equity

The contractual right to obtain information about a company, including, for example, attending board meetings. Typically received by venture capitalists investing in privately ...

institutional investor

Financial services; Private equity

An institution such as an investment company, mutual fund, insurance company, pension fund or endowment fund that generally has substantial assets and experience in investments. ...

investment letter

Financial services; Private equity

A written agreement between an investor and a seller of securities in a private placement.

invested capital

Financial services; Private equity

See ‘Capitalisation’.

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