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IVC Research Center has compiled a list of commonly used terms and definitions related to the Venture Capital, Private Equity and High-Tech industries, the terms and definitions will help familiarize you with terms associated with the content of this website. If during your visit to IVC website you come across some unfamiliar term, please don't hesitate to contact us. We will be happy to be at your service.
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Short-term financing which is expected to be paid back relatively quickly, such as by a subsequent longer-term loan. Also called bridge financing. Usually convertible to equity.
Financing by selling common stock or preferred stock to investors.
Takeover of a company or controlling interest in a company, using a significant amount of borrowed money.
Takeover of a company through management's purchase of all outstanding shares.
Late-stage venture capital, usually the final round of financing prior to an IPO.
A transaction in which accredited investors are allowed to purchase stock in a public company, usually below the market price. The stock is registered with the SEC so that it may later be resold to the public.
Money used for the initial investment in a project or startup company, for proof-of-concept, market research, or initial product development. Also called seed financing or seed money.
A financing vehicle for infrastructure and equipment needs, in cases when a company doesn't qualify for bank or traditional leasing financing or when additional venture capital may either be unavailable or trigger unwanted penalties in the original venture-capital agreement.
A middle ground of financing for firms that need equity capital, don't want or can't get sufficient bank financing, but that are not yet ready to go public with their products or services.
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An individual who provides capital to one or more startup companies.
A subsidiary of a large corporation, which makes venture capital investments.
A fund that invests primarily in stocks, usually common stocks.
A fund, which invests in other funds.
A fund, usually used by wealthy individuals and institutions, which is allowed to use aggressive strategies that are unavailable to mutual funds, including selling short, leverage, program trading, swaps, arbitrage, and derivatives. Since they are restricted by law to less than 100 investors, the minimum investment is typically $1 million. The general partner usually receives performance-based compensation.
A company that owns enough voting stock in another firm to control management and operations by influencing or electing its board of directors. Also called parent company.
A company or facility designed to foster entrepreneurship and help startup companies, usually technology-related, to grow through the use of shared resources and intellectual capital.
Firm that invests the pooled funds of retail investors for a fee. There are two types: open-end (mutual funds) and closed-end (investment trusts). Also called investment fund.
A company which isn't listed in Israel but has at least one of the following characteristics: Headquartered in Israel; Have an R&D center in Israel; Have a senior Israeli management or received funding from an Israeli company.
The firm that organizes, manages, and administers a mutual fund.
An open-ended fund operated by an investment company, which raises money from shareholders and invests in a group of assets, in accordance with a stated set of objectives. Benefits include diversification and professional money management. Shares are issued and redeemed on demand, based on the fund's net asset value, which is determined at the end of each trading session.
a fund, which purchases a security from another investor rather than the issuer, subsequent to the original issuance in the primary market.
An independent company created from an existing part of another company through sale or distribution of new shares.
A new business venture in its earliest stage of development.
A Private Equity fund, which invests in troubled companies and cause a sharp, positive reversal in their performance.
Funds made available for startup firms and small businesses with exceptional growth potential. Managerial and technical expertise are often also provided. Also called risk capital.
Limited partnership that is formed to invest in small startup businesses with exceptional growth potential.
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Acquiring control of a corporation, called a target, by stock purchase or exchange, either hostile or friendly.
The first sale of stock by a company on the public market.
The combining of two or more entities into one, through a purchase acquisition or a pooling of interests. Differs from a consolidation in that no new entity is created from a merger.
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The process of investigation, performed by investors, into the details of a potential investment, such as an examination of operations and management and the verification of material facts.
A trust established by a corporation for the allocation of some of its stock to its employees over time, intended to motivate employees, and often providing tax benefits to the company. Also called stock purchase plan.
An investment entity that has no cash or cash equivalents for new investments. It makes follow-on investments only.
A company's principal provider of capital, such as the entity, which originates and structures a syndicated deal.
The right, but not obligation, to buy (call option) or sell (put option) a specific amount of a given stock, commodity, currency, index, or debt, at a specified price (strike price) during a specified period of time. For public companies stock options, the amount is usually 100 shares. Also called option contract.
In venture capital, a document summarizing the details of a potential venture capital investment, which serves as the basis for a final business agreement.
A certificate, usually issued along with a bond or preferred stock, entitling the holder to buy a specific amount of securities at a specific price, usually above the current market price at the time of issuance, for an extended period, of several years or for an unlimited period. Also called subscription warrant.
To charge an asset amount to expense or loss, in order to reduce the asset value.
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A startup company, which is in its early days of product development and fund raising.
Discovering new knowledge about products, processes, and services, and then applying that knowledge to create new and improved products, processes, and services that fill market needs.
Venture capital term used to describe a company which is somewhere between startup and IPO. Venture capital committed at this level usually has less risk but less potential appreciation than at the startup level, and more risk but more potential appreciation than in an IPO.
A company whose yearly revenue does not exceed $10 million dollars.
A company whose yearly revenues exceed $10 million dollars and has a double digit yearly growth rate.
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Companies Actively Seeking Capital
