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Typically, collateral is an asset a Funder accepts as security for extending the capital. Most traditional lenders (e.g., banks) require collateral of 125%-175% of the loan amount (or more, if the collateral is of poor quality or significant risk of depreciation). For example, if the Recipient of a loan defaults on their payments, the lender may seize the collateral and sell it to recoup some or all of their losses. A lender's claim to a borrower's collateral is called a lien. Loans that are secured by collateral are called secured loans. Once collateral is assigned to a secured loan, it is essentially "locked" exclusively to that loan. This means the Recipient cannot undertake another loan until the previous loan is fully repaid and the collateral returned to the Recipient so that it can be used to seek additional financing.

Generally has two meanings: one for accounting, and one for finance.

In accounting, capitalization is an accounting rule used to recognize a cash outlay as an asset on the balance sheet, rather than an expense on the income statement.

In finance, capitalization is a quantitative assessment of a firm's capital structure. The capital structure is a particular combination of debt and equity used by a company to finance its overall operations and growth. Debt comes in the form of bond issues or loans, while equity comes in the form of common stock, preferred stock, or retained earnings. Short-term debt such as working capital requirements is also considered to be part of the capital structure.

The date Due-Diligence is successfully completed, all conditions precedent to be completed have been satisfied, and the legal documents finalized. The funds can then be released according to the Project Plan.

Typically, a fee due upon funding (typically deducted from the initial advance).

Planoven does NOT impose Closing Fees (but does impose a Management Fee paid only when we successfully provide AGC. Planoven's Management Fee is not a standard closing fee as it also includes governance and guidance oversight for the term of the Project)

The Recipient is responsible to pay all reasonable costs related to obtaining the funds.

Typically, a drag-along right is a provision that enables a majority shareholder to force a minority shareholder to join in the sale of a company. The majority owner doing the dragging must give the minority shareholder the same price, terms, and conditions as any other seller. Drag-along rights are designed to protect the majority shareholder.

Typically refers to shareholder equity, which represents the shareholders’ stake in the project or company.

A set time when an offer or contract expires after which it is rendered null and void.

A covenant is a promise that certain activities will or will not be carried out. Covenants in finance most often relate to terms in a financial contract, such as a loan document (for example, stating limits of how, when and where the funds are used by the Recipient).

Planoven does NOT generally impose financial covenants.

For loans, an interest-only period where no principal is charged. This dramatically reduces the cash burn required to service the loan within the Grace Period.

Planoven offers Grace Periods up to 3 years.

The annual rate of Interest to be paid to a lender — essentially a rental or leasing charge to the borrower for the use of the lender’s cash. For loans, the interest rate is applied to the principal, which is the amount of the loan. The interest rate is the cost of debt for the borrower and the rate of return for the lender.

A life insurance policy that a company purchases on a key person's life. The company is the beneficiary of the plan and pays the insurance policy premiums. Key Person Insurance is needed if the sudden loss of a key person would have a large negative effect on the company's operations. The payout provided from the death of the key person essentially buys the company time to find a new person or to implement other strategies to save the business.

A joint venture (JV) is a business arrangement and legal structure in which two or more parties agree to accomplish one or more specific tasks. However, the venture is its own entity, separate from the participants' other business interests.

Planoven uses Joint Venture accounts as the legal structure through which all AGC transactions are performed. The primary benefits are simpler, more transparent accounting, improved international legal and financial compliance oversight, as well as the ability for the Partner-Client to always verify their Advance has not been misappropriated.

A document declaring the preliminary commitment of one party to do business with another party — commonly used in major business transactions.

Planoven requires an LOI from the Recipient to start the engagement with us. Without it, we cannot proceed.

A document similar to an LOI, but in response to the requesting party's LOI on what the Funder expects to be able to provide - also commonly used in major business transactions.

Typically, the Funder and the Recipient agree that neither shall obtain access to any material specific to the trade secrets of either party (except for financial information about the Recipient). To ensure compliance, the Funder and Recipient generally enter into a “Non-Disclosure Agreement”.

A fee that is charged upon successfully facilitating AGC for the Partner-Client and includes management of the partnership. The fee is acknowledged by the Partner-Client as representing reasonable compensation duly earned by Planoven for its time, effort and expense in providing and managing the AGC Facility.

The Partner-Client has the option of paying only the percent of the Management Fee that matches the percent of each tranche. However, in the event, the Management Fee is split over any number of tranches the Management Fee will be three percent (3%) higher.

Please note that Planoven does NOT generally charge Break Fees, Early Repayment Fees, Maturity Fees, and other similar deal fees - all of which can add up to more than our Management Fee.

Also known as an end-of-term fee.

Planoven does NOT generally charge a Maturity Fee.

The Recipient agrees to work in good faith towards an expeditious contract closing and that they will not, for a period of time, take any action to solicit, initiate, encourage or assist in the submission of any proposal, negotiation or offer from any person or entity other than the Funder relating to the sourcing/acquisition of funds, and shall notify the Funder promptly of any inquiries by any third parties in regards to the sourcing/acquisition of funds. If the Recipient breaches the no-shop obligation then they are required to pay penalties to the Funder (sometimes referred to as liquidated damages).

No-Shop/Confidentiality is directly related to Break Fees.

Venture Capital deals typically require the founders and key employees to enter into non-competition and non-solicitation agreements acceptable to the VC investors.

Non-competition and non-solicitation agreements are typically NOT required by lenders (their interests are generally covered by the similar, albeit, less restrictive No Shop/Confidentiality parameters highlighted above).

A legally binding contract that establishes a confidential relationship between two or more parties and protects the information they share from disclosure to outsiders.

Non-disclosure agreements are common for businesses entering into negotiations with other businesses. They allow the parties to share sensitive information without fear that it will end up in the hands of competitors. When mutually binding it is deemed a mutual non-disclosure agreement.

Such agreements are often required of new employees, if they may have access to sensitive information about the company. In such cases, the employee is the only party signing the agreement. In this case, it is deemed a non-mutual non-disclosure agreement.

Note that very few VC's will sign an NDA at the start of a potential engagement, but typically insist on one in a form acceptable to them to complete a funding transaction (which may be non-mutual).

On the other hand, Planoven does sign NDAs early in the process.

The capital-provider may require observer rights to all board meetings. They may also require a full board seat.

The value of the project/business before obtaining additional funding.

Typically, equal monthly payments until the Maturity Date.

These are standard and include representations and warranties regarding technology ownership, etc.

The right of first refusal is a contractual right, but not an obligation, to enter into a business transaction with a person or company before anyone else can. If the entity with the right of the first refusal declines to enter into a transaction, the owner of the asset who offered the right is free to open the bidding up to other interested parties.

The Funder, as lender, has full charge over all assets and ranks senior to all other debt. That means the lender has first priority when the Recipient is unable to pay-back the loan.

A non-binding agreement setting forth the basic terms and conditions under which a financial transaction (VC investment or Loan) will be made. It serves as a template to develop more detailed legally binding documents. Once the parties involved reach an agreement on the details laid out in the term sheet, a binding agreement or contract that conforms to the term sheet details is then drawn up.

Typically, the Recipient is not permitted to disclose the terms of a Term Sheet to any person other than officers, members of the Board of Directors and the Company’s accountants and attorneys without written consent.

A Term Sheet and Indicative Discussion Document are very similar in function and intent.

The word "tranche" comes from the French word for slice. Each portion, or tranche is one part of the same overall amount, but with varying risks, rewards and maturities to appeal to a diverse range of requirements.

Planoven provides AGC in tranches based on the requirements as outlined in the Partner-Client's Project Plan.

A voting right is a right of shareholders to vote on matters of corporate policy, including decisions on the makeup of the Board of Directors (BOD), issuing securities, taking on debt, initiating corporate actions and making substantial changes in the corporation's operations.

Because a corporation's officers and BOD manage its daily operations, shareholders have no right to vote on basic management issues.

Common shareholders typically have one vote per share, owners of preferred shares have no voting rights at all.

Warrants give the right, but not the obligation, to buy or sell a security (typically equity) at a certain price before their expiration. The price at which the underlying security can be bought or sold is referred to as the exercise price or strike price.

Unlike options, warrants are dilutive. When an investor exercises their warrant, they receive newly issued stock, rather than already-outstanding stock.

An American warrant can be exercised at any time on or before the expiration date, while European warrants can only be exercised on the expiration date.