Glossary

Glossary created by Funderbeam. Contributions from the Business Angel Institute and Invesdor.com

Terms beginning with: C


Canvas

A business-plan template often used by startup companies. It is a short and visual alternative to the traditional business plan and can be specifically geared towards startups. Specific variants include the Business Model Canvas, the Lean Canvas, and the Startup Canvas.

Capped note

A specific kind of convertible debt. When notes are converted into equity the conversion valuation is capped or sealed, i.e the minimum conversion rate for the investor is fixed. This is considered a more favourable term to the investor than uncapped notes which have no such guarantees.

Carried interest

Compensation for a fund manager in the form of a share of profits from an investment. Carried interest acts as an incentive for the fund manager to improve the fund's performance.

Carry

Please see Carried interest

Cash burn

Please see Burn rate

Closing conditions

Specific conditions that have to be met before one or all parties to an agreement have to honour their obligations in full. The parties have no obligation to proceed with the agreement while closing conditions remain unsatisfied or incomplete.

Closing date

The date when a transaction is brought to completion.

Club investments

Investments done by an investment club, formed by a group of people for the purpose of pooling money and investing in several companies. Related: Co-investments and Direct investments

Co-investments

Investments alongside other investors in the same round. Related: Club investments and Direct investments

Coach

Please see Investor roles

Competition risk

The risk of a loss of market share due to changes in the market or actions of competitors.

Conversion features

Rights to convert an existing type of investment into another. For example, a convertible bond gives the bond holder the right to convert the bond into shares (equity).

Convertible debt

Debt that can be converted into shares (equity).

Corporate venturing

A term that is used when a company either invests internally in innovation and the development of a new product, makes an external investment in another company, or creates an alliance with another company for innovation purposes.

Crowdfunding

The practice of soliciting financial contributions from a large number of people, especially from the online community. Crowdfunding activities are generally intermediated by crowdfunding platforms.

Crowdfunding platforms

Online services and communities that make it possible to collect small financial contributions from a large group of people. This is an alternative to traditional loans or investment from friends and family, angel investors, and venture capital.

Customer development

A Lean startup framework that helps to validate the product/market fit and build the right product or service for customers. Its four stages are customer discovery, customer validation, customer creation, and company building.