Legal Definitions - sweetener

Definition: A sweetener is something offered to make a deal more attractive. It can be an incentive given to a brokerage firm to work with a company or a special feature added to a stock to make it more appealing to investors.

1. Brokerage Firm: A company may offer a sweetener to a brokerage firm to encourage them to work with them. For example, they may offer a higher commission or a bonus payment if the firm agrees to underwrite their stocks.

2. Stock Feature: A sweetener can also be a special feature added to a stock to make it more attractive to investors. For example, a company may make their stock convertible, meaning it can be exchanged for another type of security, like a bond. This makes the stock more appealing because investors have more options for how they can use it.

These examples illustrate how a sweetener can be used to make a deal more attractive. In the first example, the company is offering a financial incentive to the brokerage firm to encourage them to work with them. In the second example, the company is adding a special feature to their stock to make it more appealing to investors. Both of these tactics are used to make a deal more attractive and increase the chances of success.