Basis Points

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What are Basis Points?

Basis points (BPs) are a measurement unit of interest rates and other financial calculations involving percentages. A single basis point is equivalent to 0.0001, or 0.10%. Startups are primarily concerned with BPs when they related to interest rates and investment returns.

Basis Points Examples

Examples of how startups use basis points include:

  • Example 1: Negotiating a lower interest rate
  • Example 2: Determining a change in ROI
  • Example 3: Evaluating stock performance
  • Example 4: Allocating dividends
  • Example 5: Establishing interest ownership

Business lawyers can help you negotiate and draft contracts that deal with basis points.

Here is an article that goes further into basis points.

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ContractsCounsel is not a law firm, and this post should not be considered and does not contain legal advice. To ensure the information and advice in this post are correct, sufficient, and appropriate for your situation, please consult a licensed attorney. Also, using or accessing ContractsCounsel's site does not create an attorney-client relationship between you and ContractsCounsel.


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