Entrepreneur’s Dictionary - BUBA Wiki Acquisition: An acquisition occurs when one company acquires from another company either a controlling 1 interest in the company's stocks or a business operation and its assets. Angel Investor: Angels are financially sophisticated, wealthy individuals, with net worth exceeding $1 2 million, who invest their funds on a part-time basis in startup or early-stage ventures. Appraisal: It's a formal, structured system of measuring, evaluating job related behaviors and outcomes to discover reasons of performance and how to perform effectively in the future so that employee, organization 3 and society all can benefit. Balance Sheet: A balance sheet or statement of financial position is a summary of the financial balances of a sole proprietorship, a business partnership, a corporation or other business organization. Assets, liabilities and ownership equity are listed as of a specific date, such as the end of its financial year. A balance sheet is 4 often described as a "snapshot of a company's financial condition. Breakeven Point: In economics & business, specifically cost accounting, the break-even point (BEP) is the point at which cost or expenses and revenue are equal: there is no net loss or gain, and one has "broken even." A profit or a loss has not been made, although opportunity costs have been "paid," and capital has 5 received the risk-adjusted, expected return. Business Incubator: Business incubators are one option communities have to support business survival and growth. Incubators are locally based institutions that provide shared physical space and business support services to new and young firms. Incubators generate jobs and income and create linkages with 6 firms inside and outside the local economy over the long run. Business Plan: Business plan is a document that outlines the basic idea underlying a business and 7 describes related startup considerations. Capital: It’s defined as the time-dependent accumulation of subsequently accessible resources. 8 Cash flow statement: In financial accounting, a cash flow statement, also known as statement of cash flows, is a financial statement that shows how changes in balance sheet accounts and income affect cash and cash equivalents, and breaks the analysis down to operating, investing, and financing activities. Essentially, the cash flow statement is concerned with the flow of cash in and out of the business. The 9 statement captures both the current operating results and the accompanying changes in the balance sheet. Copyright: It provides the author of an original work or the owner of the copyright the right to exclude others from; reproducing work, preparing derivative works based on the original work, distributing the work to the public, performing the work in public, displaying the work in public, and for sound recordings, performing the 10 work in public through digital audio transmission. Credibility: Business credibility is the amount of trustworthiness or expertise that a company has in the eyes of its clients, customers, business partners, and financial resources. Credibility is often a combination of the company’s credit profile and its reputation. If it is lacking one or the other, then the company may be viewed as having poor credibility. On the other hand, if the company excels in both areas, it will likely be viewed as a 11 credible company that is worth doing business with. Due Diligence: It’s a process of enquiry and investigation made by a prospective purchaser in order to 12 confirm that it is buying what it thinks it is buying. Early-Stage Firm: At this stage, the company has a product or service in testing or pilot production. In some cases, the product may be commercially available. It may or may not be generating revenues. It’s usually in 13 business less than three years. 1 EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization): EBITDA is a relatively new method of calculating a company's financial health. EBITDA — which stands for earnings before interest, taxes, depreciation and amortization — is designed to show the profitability of a business' core operations. Because businesses use different accounting standards, EBITDA makes it easier to compare one business 14 against another. Entrepreneur: An entrepreneur is the agent who unites all the factors of production and who finds value of the products the re-establishment of the entire capital his employs, and the value of wages, the interest and the rent which he pays as well as the profits belongings to himself. He may or may not supply capital but he must have judgment, perseverance and the knowledge of the world of business. He must possess the art of 15 superintendence and administration. Exit Strategy: A plan in which a trader intends to get out of an investment position made in the past. It's a way of cashing out or closing a position. Unless your plan is to do nothing (allow the option to expire or allow 16 assignment of your shares) all exit strategies begin with buying back the option. Feasibility Study: Before you begin writing your business plan you need to identify how, where, and to whom you intend to sell a service or product. You also need to assess your competition and figure out how much money you need to start your business and keep it running until it is established. Feasibility studies address things like where and how the business will operate. They provide in-depth details about the business to determine if and how it can succeed, and serve as a valuable tool for developing a winning 17 business plan. Fixed Cost: Fixed costs are normally unaffected by changes in sales volume. They are said to have little direct relationship to the business volume because they do not change significantly when the number of sales increases or decreases. Insurance premiums, real estate taxes, and depreciation on equipment are 18 examples of fixed costs. High-Growth Firm: All enterprises with average annualized growth greater than 20% per annum, over a three year period, and with ten or more employees at the beginning of the observation period are the high19 growth firms. Growth is thus measured by the number of employees and by turnover. Income statement: Income statement provides information about the profitability of a firm for a period of 20 time. Incubation: Incubation accelerates the successful development of entrepreneurial companies through an array of business support resources and services, developed or orchestrated by incubator management, and 21 offered both in the incubator and through its network of contacts. Intrapreneur: A person within a corporation who takes direct responsibility for turning an idea into a 22 profitable finished product through assertive risk-taking and innovation. Joint Venture: A joint venture is a business partnership in which two or more companies agree to invest 23 cash or other assets in a particular project or business activity. Merger: A merger can refer to any takeover of one company by another, when the businesses of each company are brought together as one. A more narrow definition: it’s the coming together of two companies of 24 roughly equal size, pooling their resources into a single business. Networking: A network has been defined as a set of modes and a set of ties representing some 25 relationship, or lack of relationship between nodes. Patent: A patent is a document that defines the scope of patent rights to exclude others from making, using, 26 or selling an invention that is the subject of the patent. 2 Preferred Stock: Preferred stock is one of the two types of stock issued by corporations seeking to bring in capital. As with common stocks or bonds, the money that is received from the sale of these shares goes into 27 the company coffers in return for the issuance of the shares to the shareholders. Private Equity Fund: Private equity funds are businesses that draw upon capital and debt in the international financial system to acquire stakes in companies that are intended to be sold for profit after a 28 number of years. Seed Capital: Seed money, sometimes known as seed funding, is a form of securities offering in which an investor purchases part of a business. The term seed suggests that this is a very early investment, meant to support the business until it can generate cash of its own, or until it is ready for further investments. Seed 29 money options include friends and family funding, angel funding, and—recently—crowdfunding. Seed-Stage Firm: It’s the initial stage. At this stage, the company has a concept or product under development, but is probably not fully operational. This stage is usually in existence less than eighteen 30 months. Series-A Financing: Typically the series A is the company's first institutional financing-led by one or more venture investors. Valuation of this round will reflect progress made with seed capital, the quality of management team, and other qualitative components. Generally a Series-A financing will purchase a 25 percent to 50 percent ownership stake. Typical goals of this financing are to finalize product development for information technology companies, hire top talent, achieve value-creating milestones, further validate product, expand business development efforts, and attract investor interest in the next financing (at an 31 increased valuation). Series-B Financing: The Series-B is usually a larger financing than the series A. At this point, we can assume for information technology companies that development is complete and technology risk removed. Early revenue streams may be taking shape. Valuation is gauged on a blend of subjective and objective data-human capital, technical assets, intellectual property, milestones achieved thus far, comparable company valuations, rationalized revenue forecasts. Goals of this financing may include operational development, scale-up, further product development, revenue traction, and value creation for the next round 32 of financing. Social Capital: It’s defined as the institutions, relationships, attitudes, and values that govern interactions 33 among people and contribute to economic and social development. Startup: A startup is a temporary organization designed to search for a repeatable and scalable business 34 model. Variable Cost (Variable Expenses): The accounting definition of variable expense is expense linked directly to the production of or purchase of products for sale to customers. In a manufacturing business, an example would be cost of raw materials or parts that are ultimately used in the manufacture of a finished 35 product. 36 Venture: It’s the taking risk in a commercial context in order to create new business. Venture Capital: It’s is a cluster private equity dedicated to finance new ventures. 37 3 References 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26. 27. 28. 29. 30. 31. 32. 33. 34. 35. 36. 37. 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