Entrepreneur's Everything You Need to Grow Your New Business
INCUBATORA program for new companies. Incubators tend to either be non-profit or lease to a new company (coworking space is shared with other startups). The work of incubators may take place at any stage of the lifecycle, but many incubators concentrate exclusively on later stages.
ACCELERATORA time-bound cohort program that offers equity financing for early-stage companies.
A form of startup financing where the founders use their financial resources and those of friends, family, employees, and suppliers to launch the business.
ANGEL INVESTORSA high-net-worth individual, usually an entrepreneur or professional who invests early-stage capital in the form of debt, ownership capital, or both, into a startup business.
VENTURE CAPITALIST (VC)He holds a high risk as the investor is looking for an equity share in a startup or at least in an early-growth company. For the supply of capital, the VC would usually take a large ownership percentage of the business along with a position on its board.
BALANCE SHEETA financial statement that describes the assets owned by the business and shows how those assets are financed with the funds of creditors (liabilities), the equity of the owners, or both. Also known as the statement of financial position.
BREAKEVEN ANALYSISThis is an analysis that would be used to help determine how much or how much more a company needs to sell to pay for its fixed investment, in other words, when it breaks even on its cash flow.
BUSINESS MODELConceptual description of an enterprise's revenue sources, cost drivers, investment size, and success factors and how they work together.
BUSINESS PLANA document that sets out a business opportunity, establishes the market to be served, and details how the entrepreneurial firm will pursue it. At least, it describes in unique terms the qualifications that the management team brings to the effort, defines the resources that are required for success, and provides forecasts of results over reasonable time horizons.
EQUITY CAPITALCapital is placed in a business that accrues rights of ownership upon its investors.
GOODWILLAn intangible balance sheet asset. If a company has acquired another company for a price more than the fair market value of its assets, that "goodwill" is treated as an asset. Goodwill may also symbolize intangible things like the reputation of the acquired company, the brand names of the company, or the patents that may have a real worth.
FIXED COSTSCosts that business incurs remain relatively constant irrespective of the number of goods and services produced.
OPERATING EXPENSESOn the balance sheet, a broad category includes administrative expenses, employee salaries, rents, sales, and marketing costs as well as other costs of businesses not directly attributable to the manufacturing cost of a product.
INCOME STATEMENTA financial statement that summarizes the effects of operations during a given period. Often called the profit and loss statement or P&L.
CASH-FLOW STATEMENTA financial statement that shows why cash and cash equivalents changed in value over the accounting period.
GROSS PROFITSales revenues minus the cost of goods sold. Gross profit is probably the most direct measure of profitability. Often called gross margin.
NET PROFIT (NET INCOME)The "bottom line" of the income statement. Net income is revenues less expenses less taxes. Also known as net earnings or net profits.
INITIAL PUBLIC OFFERING (IPO)The first public offering of a corporation's shares.
SOLE PROPRIETORSHIPA business owned by one individual. For tax and legal liability purposes, the owner and the business are the same entity.
LIMITED-LIABILITY CORPORATION (LLC)The hybrid form of company structure, with the attributes of a partnership and a corporation.
LIMITED PARTNERSHIP (LP)A hybrid form of organization has both limited and general partners. The general partner (there may be more than one) assumes management responsibility and unlimited liability for the business and must have at least a 1 percent interest in profits and losses. The limited partner (or partners) has no voice in management and is legally liable only for the amount of his or her capital contribution plus any other debt obligations specifically accepted.
PITCH DECKA slide presentation prepared to explain a new business venture to potential investors.
EXECUTIVE SUMMARYA brief section in a business plan that persuasively explains why the opportunity is timely, describes how the company plans to go after it, outlines the entrepreneur's expectations of results, and includes a thumbnail sketch of the company and the management team.
MINIMUM VIABLE PRODUCTA product offering that has barely enough features at that early stage of testing assumptions about what customers value, how the product will perform in the market, etc.
NET WORKING CAPITALCurrent assets less current liabilities; the amount of money a company has tied up in short-term operating activities.
PROFIT MARGINPercentage of each dollar of sales that reaches the bottom line. Profit margin is net income after tax divided by net sales. Sometimes called return on sales.
ROADSHOWA series of meetings of company officials with prospective investors, usually held in major cities around the country in conjunction with an impending issue of corporate securities. The investors address questions to the CEO or CFO about the company and the contemplated offering of securities.
ROUND(S) (FUNDING)One way of defining the stage of a startup's growth. The seed stage is the first funding round, where the venture first borrows capital to finance growth, usually from family or friends. The Series A round is the next stage, often involving angel investors. Finally, the Series B round takes the company to scale and often includes venture capital.