General Definitions

This Definitions section is a living document and will be edited over time as new terms are introduced or the need to define them arises.
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Angel Investor: An individual who invests their own money in startup or early-stage businesses with high risk but also high potential for growth.

Entrepreneur: An individual who takes risks and starts a business. Entrepreneurs are driven by innovation and creating new products or services.

General Partner (GP): In a venture capital firm, the general partner is responsible for managing the investment fund, making investment decisions, and overseeing the portfolio companies.

Limited Partner (LP): A limited partner in a venture capital firm is an investor who provides capital but does not have any involvement in the day-to-day operations of the firm or its portfolio companies. Limited partners typically enjoy some profit-sharing rights but have limited liability for the firm’s debts.

Initial Public Offering (IPO): A company’s first sale of stock to the public. An IPO allows a company to raise capital by selling shares of its ownership to individual and institutional investors.

Return on Investment (ROI): A metric used to measure the profitability or efficiency of an investment. ROI is expressed as a percentage and is calculated by dividing the net profit (gain) by the total investment cost.

Seed Funding: The earliest stage of financing for a startup company. Seed funding is typically used to develop a business plan, conduct market research, and create a prototype of the product or service.

Series A Financing: The first round of institutional financing for a startup company. Series A funding is typically used to further develop the product or service, expand marketing efforts, and build a team.

Venture Capital (VC): A type of private equity financing that provides funding to startups and early-stage companies with high growth potential. Venture capitalists are willing to invest in companies with high risk because they also have the potential for high returns.

Valuation: The process of determining the fair market value of a business. Valuation is important for a number of reasons, including fundraising, mergers and acquisitions, and estate planning.