Venture Capital (VC): Funding provided by investors to startup companies and small businesses that are deemed to have long-term growth potential.
Angel Investor: An individual who provides financial backing for small startups or entrepreneurs, often in exchange for ownership equity.
Seed Funding: Initial capital used to start a business, often provided by friends, family, or angel investors.
Series A, B, C Funding: Rounds of financing in which a company raises capital from investors at different stages of its growth. Series A is typically the first significant round after seed funding.
Private Equity (PE): Investment funds that invest in private companies or take public companies private.
Initial Public Offering (IPO): The first sale of stock by a company to the public, transitioning from private to public ownership.
Crowdfunding: The practice of funding a project or venture by raising small amounts of money from a large number of people, typically via online platforms.
Bootstrapping: Building and growing a business with little or no external capital, relying on personal savings and revenue generated by the business.
Debt Financing: Obtaining capital by borrowing, often through loans that need to be repaid with interest.
Equity Financing: Raising capital by selling ownership shares in a company.
Convertible Note: A type of short-term debt that can convert into equity under predefined conditions.
Term Sheet: A non-binding agreement outlining the basic terms and conditions under which an investment will be made.
Due Diligence: The process of investigating and evaluating a potential investment or acquisition to ensure it aligns with the investor’s goals and expectations.
Valuation: The process of determining the current worth of a company.
Leverage: The use of various financial instruments or borrowed capital to increase the potential return of an investment.
Burn Rate: The rate at which a company is spending its capital, often expressed as a monthly or annual figure.
Runway: The amount of time a startup or company can operate before it exhausts its funding.
Pitch Deck: A presentation that provides an overview of a business, its market, and its funding needs, typically used to attract investors.
Most Used Business Funding Terms In Shark Tank
