Definition
Dividend reinvestment plan (DRIP) is the program allowing shareholders to automatically reinvest dividends in additional shares. Founders reach for it when a vague conversation needs a shared, specific meaning. Name it clearly, then let the next decision — a hire, a price, a test, or a pass — follow from that meaning.
In the room
How the word shows up in a real conversation.
A mentor asks, “What is your Dividend reinvestment plan (DRIP)?” The useful answer is concrete: program allowing shareholders to automatically reinvest dividends in additional shares. A slide title is not an answer.
Common mistake
Using Dividend reinvestment plan (DRIP) as a label instead of a fact. If you cannot point to the evidence — a number, a customer, or a written assumption — you are using the word as jargon.
See also
Dividend
Distribution of company profits to shareholders, typically paid quarterly.
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Dividend discount model
Valuation method that estimates stock value based on expected future dividends.
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Dividend payout ratio
Percentage of earnings paid out to shareholders as dividends.
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Dividend policy
Company's approach to determining how much profit to distribute as dividends.
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