Funding
Exchanging partial ownership in a firm, usually in the form of stock, for funding
Equity Funding
The three reasons that most entrepreneurial ventures need to raise money during their early life:
cash flow challenges, capital investments, and lengthy product development cycles.
A written agreement in which the owner of a piece of property allows an individual or business to use the property for a specified period of time in exchange for payments.
Lease
The first sale of stock by a firm to the public
Initial Public Offering
The two types of crowdfunding sites are
Equity and rewards
Individuals who invest their personal capital directly in startups.
Angel Investors
Limited partnerships of money managers who raise money in "funds" to invest in startups and growing firms.
Venture Capital Firms
A brief, carefully constructed statement that outlines the merits of a business opportunity
Elevator Speech
The rate at which a company is spending its capital until it reaches profitability
Burn Rate
One major advantages of getting a loan versus investment capital
No ownership in the firm is surrendered
Once a venture capitalist makes an investment in a firm, subsequent investments are made in rounds and are referred to as
Follow up Funding
The cost of buying real estate, building facilities, and purchasing equipment
Capital Investments
Finding ways to avoid the need for external financing through creativity, ingenuity, thriftiness, cost cutting, or any means necessary.
Bootstrapping
Debt financing
Getting a loan
Allows entrepreneurs to raise money in exchange for some type of amenity or reward
Rewards based crowdfunding
The seed money that gets a company off the ground typically comes from
The founders of the company
A financial transaction whereby a business sells its accounts receivable to a third party at a discount in exchange for cash.
Factoring
One major disadvantage of getting a loan
It must be paid back.
MicroVentures, Fundable, Crowdfunder, and Circle Up
Equity based crowdfunding
A competitive grant program for early stage and development projects by small businesses
SBIR
The three most common forms of equity funding
Initial public offerings, business angels, venture capitalists
The percentage of the profits the venture capitalist gets is called
a carry
The percentage of investment opportunities that are brought to the attention of angel investors that result in an investment
Yield rate
The process of investigating the merits of a potential venture and verifying the key claims made in the business plan
Due diligence
The phase of the SBIR program that awards money to develop and test a prototype
Phase II