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| Equity Offerings | Equity Offerings is raising funds by offering ownership in a corporation through the issuing of shares of a corporation's common or preferred stock. |
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| Exit | Exit the venture capitalists' term for sale or exchange of a significant amount of company ownership for cash, debt, or equity of another company. |
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| Exit Strategy | The Exit Strategy is the way in which a venture capitalist or business owner intends to use to get out of an investment that he/she has made. Exit Strategy is also called liquidity event. |
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| First Mover Advantage | The First Mover Advantage is a company operating as market innovator, putting itself in the leadership position due to its innovation strategy.
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| First Stage Capital | First Stage Capital is the money provided to entrepreneur who has a proven product, to start commercial production and marketing, not covering market expansion, de-risking, acquisition costs.
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| First-round financing |
First-round financing is the first investment in a company made by external investors. |
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| First-stage financing |
First -stage financing: the start- up company has launched and achieved initial traction. Sales are trending upwards. Normally a management team is in place along with employees. The funding from this stage is used to fuel sales, reach the breakeven point, increase productivity, cut unit costs, as well as build the corporate infrastructure and distribution system. At this point the company is two to three years old.
It's at this stage that venture capitalists prefer to get involved.
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| Five Forces Model | Michael Porter's five forces model that considers these forces as they impact and industry and the overall competitive climate:
1) Risk of entry by potential competitors
2) Bargaining power of suppliers
3) Bargaining power of buyers
4) Threat of substitute products
5) Rivalry among established firms |
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| Fixed costs | Fixed costs are costs which do not fluctuate with business volume in the short run. Fixed costs include items such as depreciation on buildings and fixtures.
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| Follow-On |
Follow-On is a subsequent investment made by an investor who has made a previous investment in the company, generally a later stage investment in comparison to the initial investment.
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| Fund of Funds | Fund of Funds is a mutual fund which invests in other mutual funds. Fund of Funds is an investment vehicle designed to invest in a diversified group of investment funds.
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| Ground Floor | Ground floor is a term used for the first stage of a new venture or investment opportunity. |
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| Incubator | An Incubator is a company or facility designed to foster entrepreneurship and help startup companies, usually technology-related, to grow through the use of shared resources, management expertise and intellectual capital. |
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| Institutional Investors | Institutional Investors refers mainly to insurance companies, pension funds and investment companies collecting savings and supplying funds to markets but also to other types of institutional wealth like endowment funds, foundations, etc.
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| Internal Rate of Return (IRR) | Internal Rate of Return or IRR is often used in capital budgeting, it's the interest rate that makes net present value of all cash flow equal zero. Essentially, IRR is the return that a company would earn if they expanded or invested in themselves, rather than investing that money abroad. |
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| Investment Bank | An Investment Bank is a financial intermediary that performs a variety of services which includes underwriting, acting as an intermediary between an issuer of securities and the investing public, facilitating mergers and other corporate reorganizations, and also acting as a broker for institutional clients. |
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| IPO | Initial Public Offering or IPO is the first sale of stock by a private company to the public. IPOs are often smaller, younger companies seeking capital to expand their business. |
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| KPI | KPIs, or key performance indicators help organizations achieve organizational goals through the definition and measurement of progress. The key indicators are agreed upon by an organization and are indicators which can be measured that will reflect success factors. The KPIs selected must reflect the organization's goals, they must be key to its success, and they must be measurable. Key performance indicators usually are long-term considerations for an organization. |
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| Lead Investor |
ead investor is a company's principal provider of capital, such as the entity which originates and structures a syndicated deal. |
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| Letter of Intent (LOI) | A Letter Of Intent (LOI) is a document from one company to another acknowledging a willingness and ability to do business. A letter of intent is most often issued as acknowledgment of the fact that a merger between companies or an acquisition is being considered seriously. Sometimes, a letter of intent may also be issued by a mutual fund shareholder to indicate that he/she would like to invest certain amounts of money at certain specified times. In exchange for signing a letter of intent, the shareholder would often qualify for reduced sales charges. A letter of intent is not a contract and cannot be enforced, it is just a document stating serious intent to carry out certain business activities.
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| Leveraged Buy-out (LBO) | Leveraged Buy-out or LBO is an acquisition of a business using mostly debt and a small amount of equity. The debt is secured by the assets of the business. In LBO, the acquiring company uses its own assets as collateral for the loan in hopes that the future cash flows will cover the loan payments. |
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| Limited partnership | Limited partnership is a business organization with one or more general partners, who manage the business and assume legal debts and obligations and one or more limited partners, who are liable only to the extent of their investments. Limited partnership is the legal structure used by most venture and private equity funds. Limited partners also enjoy rights to the partnership's cash flow, but are not liable for company obligations. |
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| Liquidation | Liquidation is the sale of the assets of a portfolio company to one or more acquirers when venture capital investors receive some of the proceeds of the sale. |
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| Liquidation Preference | The right to receive a specific value for the stock if the business is liquidated. |
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| Liquidity event | Liquidity event is the way in which an investor plans to close out an investment. Liquidity event is also known as exit strategy. |
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