THESE ARE THE TERMS YOU NEED TO KNOW

Accelerator:A group, institution or program which offers guidance, networking, and infrastructure to companies in order to accelerate their growth. In return, the accelerator is given equity.

Accredited Investor: In certain markets and situations an investor must satisfy strict guidelines in order to be considered “accredited”. In the US, for example, an individual or group of investors must meet thresholds for net worth or income, as outlined in the 1940 Investment Company Act.

Acquisition: When a buying company purchases a controlling stake in a target business. When the board, shareholders, and managers of the target company approve of this deal, it is called a friendly acquisition. When one or more of these groups does not, it is called a hostile takeover.

Allotment: The process of providing new shares to shareholders. A shareholder's allotment is the number of shares they are to be given.

Analyst: Part of a venture capital firm. Usually asked to carry out preliminary analysis of businesses before a firm offers investment. This can involve projection analysis, early stress testing, market research, and other administrative duties.

Angel Investor: An investor primarily involved in early start-up investment. (Often a one- off investment made by family or friends to help a start-up founder get a project up and running, or a cash injection to help a business weather a difficult period.)

Anti-Dilution Protection: A clause in a contract which protects some investors from their equity or shares’ dilution when other investors buy stock in a company. This is often applied when shares in a company are sold at a value less than the amount paid originally by existing investors.

Articles of Association: A critical document which outlines the rights and restrictions attached to a company, as well as the said company's share classes and share structure. This includes information about shareholder voting and selling rights.

Assets Under Management: This includes all financial assets managed by a venture capital fund.

Associate:A member of a venture capital firm. A step up from analysts, associates carry out more in-depth research and carry out due diligence.

B2B Short for Business to Business. Simply refers to any company which does business with other businesses as their primary focus.

Bad Leaver: This happens when an employee or staff member leaves a company and violates agreed procedures. When this occurs, the “bad leaver” disqualifies themselves from share or equity payouts. In extreme circumstances, they are not allowed to hold onto their existing shares or receive money for them. An example of a bad leaver would be an employee fired for gross misconduct or someone who resigns before an agreed date of departure.

Board of Directors Custodians of a company. The board of directors (“board” for short) looks after a company's affairs and makes major decisions about its future. To have a seat on a board usually requires investment. For that reason, most boards are made up of investors or investor representatives.

Bridge Loan: A loan which bridges a financial gap. Usually used to finance a business when it is in negotiations with a large investor, to keep the business running until new investment or revenue is generated.

Burn Rate: The amount of money a company is using over a specified time. For example, a monthly burn rate. Used by venture capitalists to gauge how sustainable a target company's expenditure is.

Business Plan: A blueprint charting exactly how a business and its products will be developed, marketed, and delivered to consumers. It also includes financial cost breakdowns and projections.

Buyout: A way for an investor or founder to exit a business. It occurs when another investor offers to”buyout” another investor or founder's shares to gain more control of a business.