(so you seem like you know what you’re talking about to Investors, Partners, your Board, etc) “A” Round to Broker (not busted) Just low flow – Cash Flow.
Terms/Topics: “A” Round, Accelerator, Angels, Benchmarks, Board, Boot-Strapping, Bridge, Brokers & more . . .
“A” Round Financing – The first major round of business financing by private equity investors or venture capitalists. In private equity investing, an “A” round, or Series A financing, is usually in the form of Convertible Preferred Stock. An “A” round by external investors generally takes place after the founders have used their Seed Money to provide a “proof of concept” demonstrating that their business concept is a viable & eventually profitable one. Check the Terms carefully.
Accelerator – a Seed investment is made in return for equity and usually between $15K – $50K. Startups are admitted in classes & work in groups. They are generally given a deadline to complete intensive training and iteration (typically 1 week to 6 months). Startups end an accelerator program with a Demo Day in which they “pitch” to investors.
Accredited Investor – An individual with $1million or more in net worth (assets – liabilities), excluding their primary residence, or $200K in annual income, or $300K of income if earned jointly with their spouse, for the previous two years with a reasonable expectation of continued income for the following year.
Accrued Interest – The interest due on Preferred Stock or a Bond since the last interest payment was made.
Acquisition – A process under which a company acquires the controlling interest of another company.6
Adventure Capitalist is an entrepreneur who helps other entrepreneurs financially and often plays an active role in the company’s operations such as by occupying a seat on the Board of Directors, etc.
Advisory Board – A group of external advisors who provide – from overall strategy to portfolio valuation.
Alpha Test – Internal testing, of a pre-production model, typically on a controlled basis, with the objective of identifying functional deficiencies & design flaws – in order to correct.
Angel Financing – Seed capital raised from independently wealthy investors, for startup companies. Check Terms.
Angel Fund – A formal or informal assemblage of active Angel investors who cooperate in some part of the investment process. Key characteristics of an angel group are: control by member angels (who manage the entity or have control over the entity’s managers), & collaboration by member angels in the investment process.
Angel Group – An organization composed of accredited Investors which serves as a platform for them to coordinate investments in “seed” & “early-stage” Startup companies. The group members typically work together consolidating their resources, expertise & capital through informal networks or formal funds.
Angel Investor 1 – Once, an unrelated individual investing $$$ in a business venture, often later than Founders, Friends & Family, but before larger Corporate Investors such as Venture Capitalists (VC’s). Wealthier individuals able to invest significant funds throughout the development of a company (so-called “Super-Angels”), & VCs sometimes investing alongside and on the same terms as Angels.
Angel Investor 2 – , a more modern definition is that “angels” write checks with their own money, while “VC’s” write checks with other people’s money Angel Round – A round of investment into a startup company from Angel investors not previously affiliated with the founder. Typically the first money invested in a company after the Founders own money, + the founders friends & family.
Assets – all financial resources that a company owns. Current assets can be any form of currency, including traded inventory, investments, & checks. Fixed assets (capital assets) consist of material goods & equipment of a company, such as the land by which the company sits on, the company building, & technological machinery. Intangible assets mainly comprise of intellectual property protection, copyrights, patents, etc.
Balance Sheet – A condensed financial statement showing the nature & amount of a company’s assets, liabilities, & capital on a given date.
Bankruptcy – An inability to pay debts. Chapter 11 of the bankruptcy code deals with re-organization, which allows the debtor to remain in business and negotiate for a re-structuring of debt.3
Benchmarks – are performance goals against which a company’s success is measured. They are often used by investors to help determine whether a company should receive additional funding or whether management should receive extra stock.
Board of Directors – A group of people elected by the company’s shareholders – that makes decisions on major company issues, including hiring/firing the CEO.
Book Value – of a stock is determined from a company’s Balance sheet by adding all current & fixed assets, then deducting all debts, other liabilities, & the liquidation price of any preferred issues. The sum arrived at is divided by the number of common shares outstanding, and the result is Book Value per common share.
Boot–Strapping – Funding a company only by re-investing initial profits.
Bridge Financing – A limited amount of equity or short-term debt financing typically raised within 6-18 months of an anticipated public offering or private placement meant to “bridge” a company to the next round of financing.
Bridge Loan – A temporary short-term loan that is obtained for use for an interim period, typically one year, until the borrower can obtain a more comprehensive, longer-term financing package.
Broker-Dealer – In reference to “Crowd-Funding”, one of the two types of “Intermediary” (“Portals” being the other) authorized by the “JOBS Act” to handle the sale of Crowd-funded securities (i.e. equity or debt instruments) by an “issuing company”.
Brokers – Licensed individuals or firms, which charge a fee, to raise capital for startup companies from private investors & funds.
Comments: Let me know about any other Terms you’d like to see.
from Funding Stages 11/16 enhanced by Peter/CXO Wiz4biz