Venture Capital

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Accelerator A fixed-term, cohort-based program that helps start-ups refine their business models, access mentorship, and potentially secure funding.

Angel Investor High-net-worth individuals who provide financial support to start-ups in exchange for equity or debt.

AngelLis An online platform that connects start-ups with accredited investors and provides tools for raising capital.

Board Observer An individual who attends board meetings but does not have voting rights.

Board of Directors A group of individuals elected by shareholders to oversee the management and strategic direction of a company.

 Bridge Financing A short-term funding solution provided to start-ups to bridge the gap between funding rounds.

Burn Rate The rate at which a company spends its raised capital, often represented by monthly or annual expenses.

Cap Table Management Software Software platforms designed to help companies manage their equity ownership, capitalization, and other related records.

Cap Table Software Software solutions that help manage and track the ownership percentages and ownership history of a company.

Capital Gap The difference between the capital a company needs to operate and the capital it actually has on hand. It represents the shortfall in funds required for business operations or expansion.

Capitalization Table (Cap Table) A spreadsheet that shows the ownership stakes of a company’s shareholders, including investors and founders.

Convertible Note A debt instrument that can be converted to equity at a later stage, typically during a subsequent financing round.

Corporate Venture Capital Funds invested by established corporations into start-ups, primarily for strategic reasons rather than purely financial returns.

Dilution The reduction in the ownership percentage of existing shareholders due to the issuance of new equity.

Due Diligence The process of conducting a comprehensive investigation into a company’s financial, legal, and operational information before investment.

Due Diligence Checklist A comprehensive list of documents and information required from a start-up during the due diligence process.

Due Diligence Expert Professionals specializing in reviewing and analyzing financial, legal, and operational aspects of a company during the due diligence process.

Equity Financing The process of raising capital by selling shares or equity ownership in a company.

Exit Multiples The ratio between the exit valuation of a company and the amount of investment made by the venture capitalists.

Exit Strategy A plan devised by investors and founders to realize their return on investment, usually through selling the company or going public.

Exits The successful realization of an investment, such as a company sale or an IPO.

Follow-0n Investment Additional investments made by existing investors in a company during subsequent funding rounds.

General Partner (GP) The managing entity in a venture capital fund responsible for making investments and managing portfolio companies.

Incubator An organization or program that provides mentorship, resources, and support to early-stage start-ups.

Intellectual Property (IP) A collective term for creations of the mind, including patents, copyrights, trademarks, and trade secrets.

IPO (Initial Public Offering) The first sale of equity shares to the public by a private company, transitioning it into a publicly-traded entity.

Lead Investor The primary venture capitalist or firm leading a round of financing, responsible for negotiating terms and coordinating other investors.

Limited Liability The legal protection that limits the personal financial liability of shareholders or owners to the extent of their investment in the company.

Limited Partner (LP) An investor in a venture capital fund who provides the capital but has limited involvement in fund operations and decision-making.

Liquidation Preference A clause in an investment agreement that determines the order of payment to investors in the event of liquidation or exit.

M&A (Mergers and Acquisitions) The consolidation of two or more companies, often through the acquisition of one company by another. 

Non-disclosure Agreement (NDA) A legal contract that outlines the confidential information shared between parties and restricts its disclosure to others.

Patent A government-granted exclusive right that allows a company to protect its inventions or intellectual property.

Portfolio A collection of investments made by a venture capital firm.

Pro-Rata Rights The privilege of existing investors to maintain their ownership percentage by investing equally in future funding rounds.

ROI (Return on Investment) A measure of the profitability of an investment, often calculated as the percentage gain or loss relative to the initial investment.

Run Rate An estimate of a company’s financial performance extrapolated based on its current sales or revenue over a certain period.

Runway The length of time a start-up can sustain its operations using its existing cash reserves before the need for additional funding.

Seed Funding The initial capital raised by a start-up to support product development and market research.

Series A Funding The first significant round of financing for a start-up after seed funding, generally used to support market entry and scaling.

Series B/C/D Funding Subsequent rounds of financing received by a start-up as it grows and reaches new milestones.

Start-Up A newly established business with a limited operating history and a high growth potential.

Strategic Investor An investor who not only provides capital but also offers their industry expertise and resources to support the growth of a start-up.

Syndication The pooling of funds by multiple venture capital firms or investors to collectively invest in a start-up.

Term Loan A loan provided with a specified repayment schedule, often used by start-ups to fund long-term investments.

Term Sheet A non-binding document that outlines the proposed terms and conditions of an investment agreement.

Unicorns Start-up companies that have reached a valuation of $1 billion or more.

Valuation The estimation of a company’s worth, usually determined by factors such as revenue, user base, and market demand.

Venture Capital Financing provided to early-stage or high-growth companies by investors (venture capitalists) in exchange for equity ownership.

Vesting A mechanism that grants stock or options to employees or founders over time, ensuring they stay with the company for a specified period.