A secure location where confidential data and information about a target company is made available to potential investors or acquirers as part of the due diligence process.
The stream of investment opportunities that reach an investor. They may arrive in a variety of forms, from business plans to pitches at events. Related: Deal screening
The process of investors to quickly reduce the (usually very large) number of received investment opportunities (deal flow) down to the few most promising ones which warrant further effort. Guided by the criteria of a suitable personal investment strategy prepared in advance. Related: Due diligence
The terms and structure of a transaction, whether it involves equity, bonds, convertible notes, or other ways to raise startup capital.
A form of crowdfunding in which contributors provide a loan with an expectation of financial return. They can receive interest at the end of the time loan (traditional model), or an agreed share of the firm's profits (revenue-sharing model). The target crowd includes investors and entrepreneurs. Debt crowdfunding is further divided into peer-to-peer (P2P) lending and business loans.
A type of financing where a company or government entity issues and sells bonds to finance its activities. An alternative to the traditional bank loan.
Any risk to the effectiveness or efficiency of creating a new product or service, e.g. technical infeasibility or major delays.
Disruptive startups are those few that fundamentally change the way their industry works, often creating new markets or value networks in the process, perhaps through an unexpected but vastly superior business model.
Please see Exits
The distribution of earnings (profits) to shareholders.
A form of crowdfunding in which contributors do not expect financial returns. Instead they are compensated with immaterial benefits (acknowledgements, special mentions, etc.). The typical target crowd includes philanthropists or avid fans. They are driven more by intrinsic motivations rather than investing strategies. Material rewards could be present as well, but their meaning is symbolic.
A situation where a company is financed by new investors at a lower valuation compared to earlier rounds. Related: Follow-on rounds
The right of the majority shareholder to drag (force) the minority shareholder to sell its shares in the company along with the majority shareholder.
Please see Takedowns
The process through which a potential buyer or investor carries out an in-depth analysis of a target company. Due to the amount of work involved, it begins only after there is already a clear and serious interest and ends before any deal is signed. It is basically a risk-management exercise.