Glossary

Angel Investor
An angel investor is a proven investor who comes in to help the business at an early
stage by investing time and/or money.
 
Bridge Loan
Bridge loan is a loan that people take out for a short period of time to hold them
over until they obtain a more permanent form of financing.
 
Budget
This is a plan which shows them how much money they can spend based on how
much money they earn.
Companies look at how much they expect to earn and how much they can spend
based on their earnings estimates.
 
Common Stock
Common stock represents ownership in a company. People who have common stock
can vote on members of the board of directors and receive payments in the form
of dividends. The amount of the dividend is based on the company’s performance
and how much stock is owned.
 
Capital
In the business world, capital is the wealth that a company has from money or other
assets (things that it owns). Our capital comes from our own savings and donations
from relatives.
 
Cash Flow
The cash flow is the amount of money flowing in and out of a business.
 
Cost
When a company refers to its costs, it’s talking about the amount of money spent for
goods and services. This also includes money spent on time and labor.
 
Customer Acquisition
Acquiring customers is the goal of a company’s marketing efforts. Getting customers
is called customer acquisition.
 
Due Diligence
When an investor is interested in putting money in a business, the business
undergoes something called due diligence. This is when the investor checks the
company out to see if it is a good investment. The process involves the investor
looking at the major areas of the company’s business plan to judge whether it is
realistic.
Equity
The word equity is heard all the time during “Shark Tank.” So what are they talking
about? They’re talking about ownership in the company. Its investments in which
the investor get part (or entire) ownership in a company.
 
Expenditure
Expenditures are the amount of money a company spends.
 
Franchise
When a company gives someone else the right to sell goods or services under their
name, the seller owns a franchise. The franchise owner pays a certain amount of
money in exchange for being able to use the company’s name and benefit from its
advertising and reputation. In exchange the franchise owner has to follow specific
rules.
 
Harvest
An investor(s) sells a privately held company for cash or stock in a publicly held
company, thus getting the benefits from their investment.
Don’t do it. They’re just going to invest in us and when the time is right,
implement a harvest strategy.
 
IPO
The IPO or Initial Public Offering is the dream of many start-ups. This is when a
privately owned company goes public and sells its shares to the public.
 
Leveraged Buyout
A leveraged buyout occurs when a company uses a significant amount of borrowed
money to become a controlling interest in another company (the target company).
Often the target company’s assets serve as collateral for the borrowed money.”
 
Non-disclosure Agreement
Whenever you work with someone who has a product or process that they want to
may sure you don’t share with others, you may have to sign a non-disclosure
agreement—an agreement that says that you won’t give information about the
product or project to anyone else. In other words, you agree to not disclose
information.

Purchase Order
A purchase order (PO) is a document a buyer gives a seller detailing the products or
services the seller is to provide to the buyer.
 
 Patent
A patent gives the product’s creator or the inventor exclusive rights to the product
or invention for a specific period of time. During that time period, others can’t make
the product or invention and sell it as their own.
 
Royalty
When someone has a patent or copyright to a product one hopes that they don’t sell
it for a flat fee. Instead it would be better for them to get royalties. You know, like
authors do.
Some people have gotten really rich off of royalties. That’s because the creator gets
money every time someone buys or uses the product or service.
 
Seed Financing
Seed financing is the small amount of financing an entrepreneur or inventor seeks to
prove that their concept works. It can come in three different rounds. The first
round is Series A, the second is Series B and the third is Series C.
 
Stake
When you have a stake in something, you’re involved in the outcome in some way.
The same is true when you have a stake in a business. That means that you have a
share or interest in a business.
 
Trademark
A trademark is a name or a symbol, or even a motto, that’s distinctive and legally
helps you recognize a company or its services or products.
 
Value
The value of a company is its estimated monetary worth.
 
Venture Capitalist
If you have a small or medium sized business that needs funds, but is too risky for
other investors, you may turn to a venture capitalist. That’s what they’re there for.
 
Warrants
Investors, who are not employees are sometimes given the right to buy common
stock shares at a fixed price for a period of time. Even though they have the right
to do this, they don’t have to act upon it.
 
B-plan Handbook: Jargon busters
 
1.      Feasible (value created is greater than costs incurred)
2.      Fundable (attractive for future investors and donors)
3.      Scalable (replicable across regions, product categories, or impact areas)
4.      BATNA – Best Alternative to Negotiated Agreement
 
References:
1.      https://guykawasaki.com/the-only-10-slides-you-need-in-your-pitch/
2.      https://www.thrillist.com/entertainment/nation/valuation-definition-abc-
shark-tank-explained.