Definition Of Venture Capital Terms

venture capital glossary
Interest is added to the principal balance of the bond and is either paid at maturity or the bond begins to pay both principal and interest based on the accrued principal and interest to that point. The bond is sold at a discount to its maturity value based on a financial calculation that will yield a specific amount. A demonstration of the feasibility of a concept that a startup is based on, often necessary for pitching to VCs. We have everything you need to build a successful, high-growth company—the right way. vulture capitalist A VC whose operating method is to deliberately take advantage of an entrepreneur’s troubles. unissued shares The total number of shares that are authorized to issue, but have not yet been issued to shareholders. Mathematically, this is the difference between authorized shares and issued shares.
venture capital glossary
For example, someone who pays a premium to buy a call option on a stock will lose nothing more than the premium if the underlying stock does not rise during the life of the option. Limited Partnerships– A limited partnership is a form of partnership similar to a general partnership, however, in addition to one or more general partners, there are one or more limited partners. It is a partnership in which only one partner is required to be a general partner. Btcoin TOPS 34000$ Limited Partnership Agreement – A limited partnership is a form of partnership similar to a general partnership, however, in addition to one or more general partners, there are one or more limited partners. Limited Liability Company – A Limited Liability Company is a business structure allowed by state statute. Each state may use different regulations, and you should check with your state if you are interested in starting a Limited Liability Company.
Face Value– Also known as “par value” or simply “par”, it is the value of a bond, note, mortgage, or other security as given on the certificate or instrument. For stocks, it is the original cost of the stock shown on venture capital glossary the certificate. Evergreen Promise– This occur when the company agrees to pay an employee’s salary for a number of years, regardless of when termination occurs, the day after he or she is employed or 10 years after.
The broker assumes that the customer is making the trade because of access to insider information that will make the stock or bond rise or fall sharply. Outside Director– Board of Director Member who is not a company employee. They are valuable because it is assumed they bring an unbiased opinion and diversity to the corporate decisions. The lender has no recourse to other assets of the borrower and cannot any further compensation, even is the lender does not receive the full amount of the loan from the value of the collateral. The borrower can fulfill the obligation to repay the loan by surrendering the collateral. Newco– The typical generic label for any newly organized company, particularly in the context of a leveraged buyout.

  • The aim may be to gain access to a particular product or technology that the start-up company is developing, or to support young companies that could become customers for the corporation’s products.
  • Fund raising– The process by which a private equity firm solicits financial commitments from limited partners for a fund.
  • Firms typically set a target when they begin raising the fund and ultimately announce that the fund has closed at such-and-such amount.
  • For example, one venture capital firm might sell its stake in a private company to another venture capital firm.
  • This type of buy-out happens when an investment firm’s holding in a private company is sold to another investor.
  • But sometimes the firms will have multiple interimclosingseach time they have hit particular targets (first closings, second closings, etc.) and final closings.

The National Association of Securities Dealers Rules of Fair Practice addresses this issue. The ruling prohibits the sale of such securities to members of a broker dealer’s own family or to persons buying and selling for institutional accounts and their families. Hypothecation– The pledging of securities to brokers as collateral for loans made to purchase securities or Binance blocks Users to cover short sales, called margin loans. Fully Diluted Earnings Per Share– Earnings per share expressed as if all outstanding convertible securities and warrants have been exercised. Form S-1– The form can be used to register securities for which no other form is authorized or prescribed, except securities of foreign governments or political sub-divisions thereof.
The index was devised in the 1970s when both inflation and unemployment rose sharply. It is base on the assumption that both a venture capital glossary higher rate of unemployment and a worsening of inflation both create economic and social costs for a country and its citizens.

Affinity Ventures

The misery index is linked to consumer confidence-the lower the index, in general, the more confident consumers tend to be. Merchant Banking– A type of bank that does not provide regular services to the consumer. They usually deal with corporate finance activities, such as advice on complex financing, merger and acquisition advice, and international finance. Lower Quartile– The point at which 75% of all returns in a group are greater and 25% are lower.

Venture Capital Terms

Mortgage Backed Security – A security backed by a collection of mortgages. These securities are grouped in one of the top two ratings according to a credit agency. Investors in the security receive payments derived from interest and principal on the underlying mortgages, similar to coupon payments. Misery Index– Index that combines the unemployment and inflation rates.
Therefore, lifting a leg is closing one side of a hedge while leaving the other side as a long or short position. This is done Btc to USD Bonus usually when an owner of a straddle may sell one part when the premium is sufficient to make the entire investment profitable.
Senior debt is often secured by collateral on which the lender has a first lien. Cannot use general solicitation or advertising to sell the securities. Rule 147– Provides an exemption from the registration requirements of the Securities Act of 1933 for intrastate offerings, if certain requirements are met. One requirement is that 100% of the purchasers must be from within one state. Rule 144A– An exemption from the registration requirements of Section 5 of the 1933 Act for resale’s of certain restricted securities to qualified institutional buyers.
venture capital glossary

Investment Terms Glossary

Traditionally, companies maintained their minutes in a physical minute book, which was held by the Secretary . However, these days, it’s not uncommon for companies to maintain their minutes in virtual format. allowing that stock to receive proceeds in a liquidation in advance of other classes of stock. Workout– A negotiated agreement between the debtors and its creditors outside the bankruptcy process.
Loss Carryforward– The amount of prior losses required to be offset by subsequent gain or income, in order to achieve the High Water Mark and thereupon commence accruing Incentive Fees or Incentive Reallocations. A Loss Carryforward is typically tracked using a book account maintained by a Fund Manager. It is usually done by applying the current year’s new operating losses to future year’s profits.
venture capital glossary
Right of First Refusal– The right of first refusal gives the holder the right to meet any other offer before the proposed contract is accepted. If the holder of the right does not enter into an agreement, the company can open the bidding up to others. Revlon is active when the company is up for sale and is to be broken up. Revlon imposes upon venture capital glossary directors of Delaware corporations a duty to conduct an auction when a company is for sale. Regulation D contains the rules providing exemptions from the registration requirements. Regulation B– This regulation prohibits discrimination based on of age, gender, ethnicity, nationality, marital status or the receipt of public assistance.

Corporate Venture Capital

For example, buy a Jan 50 call on ABC for $2 and writing a Jan 45 call on ABC for $5. Covenant– Formalized rules on a loan agreement that require certain financial conditions be met or prohibit other financial actions by the borrower. For example, a covenant may limit the payment of dividends, how much additional debt can be issued, and require financial targets such as sales and earnings to be met. If a covenant is violated, then the bank or loan issuer can require immediate payment. Commodities Exchange Act of 1936 – The Commodity Exchange Act regulates the trading of commodity futures in the United States. The CEA establishes the statutory framework under which the CFTC operates.
This is a take-over strategy with terms so attractive the Board risks a shareholder protest if the bid is declined. Bank Mail– A Bank’s legal and binding agreement with a company involved in a takeover not to finance another acquirer’s bid. Balloon Payment– A final payment on a debt that is much larger than the preceding payments. It is larger because of holding back most of a debt and paying it only towards the end of the agreement. The name comes from the fact that the debt becomes inflated like a balloon as a result of the compound interest accumulating on the large sum. Balloon payments can also be called partially or amortized loans.

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