Ch 19

  1. Bootstrapping
    involves operating as frugally as possible and cutting all unnecessary expenses
  2. Factor
    An agent who handles an entrepreneur's accounts receivable for a fee.
  3. Equity Capital
    cash raised for a business in exchange for an ownership stake in the business
  4. Equity
    an ownership in a business
  5. Risk Capital
    money invested in companies where there is financial risk
  6. Angel
    a private investor who funds start-up companies.
  7. Venture capital
    a source of equity financing for small business with exponential growth potential and experienced senior management.
  8. Venture captalist
    make money for investors (fund's managers)
  9. Debt Capital
    the money raised by taking out loans.
  10. Operating Capital
    working capital,s the money a business using to support its operations in the short term.
  11. Line of Credit
    an arrangement whereby a lender agrees to lend up a specific amount of money at a certain interest rate for a definite period of time.
  12. trade credit
    a source of short-term financing provided by companies in your industry of trade.
  13. Pro Forma
    refers to proposed or estimated financial statements based on predictions of how the actual operations of the business will turn out.
  14. five Cs
    • Character
    • Capital
    • collateral
    • Capacity
    • Conditions
  15. character
    a borrowers reputation for fair and ethical business pratices
  16. capacity
    refers to the ability of a business to pay a loan in view of its income and obligations
  17. capital
    net worth of a business,the amount by which the assets exceed its liabilities
  18. collateral
    security in the form of assets that a company pledges to a lender.
  19. conditions
    conditions are the circumstances at the time of the loan request.
  20. Due diligence
    the investigation and analysis a prudent investor does before making business decisions.
  21. private placement
    a private offering or sale of securities directly to a limited number of investors who meet certain sutibility standards
  22. initial public offering (IPO)
    the sale of stock in a company on a public stock exchange
  23. Stock
    a type of security that signifies ownership in corporation and represents a claim on part of  the corporations assets and earnings.
  24. working capital
    the amount of cash needed to carry out daily business operations.
  25. contingency fund
    a extra amount of money that is saved and used only when absolutely necessary.
Card Set
Ch 19
Ch 19 Business