📄 Glossary of Key Terms in Entrepreneurial Finance

Building a successful startup requires fluency in the language of finance. This glossary equips you with essential terms to navigate the world of entrepreneurial fundraising and financial management:

Angel Investor: An affluent individual who invests their own money in early-stage startups with high growth potential.
Bootstrapping: Funding a startup with personal savings, credit cards, or revenue from early sales.
Burn Rate: The rate at which a startup spends its cash reserves.
Cash Flow: The movement of cash in and out of a business over a specific period. Positive cash flow indicates a healthy financial state.
Crowdfunding: Raising capital from a large number of people through online platforms.
Debt Financing: Borrowing money from a bank or other lender, which must be repaid with interest.
Due Diligence: The thorough investigation of a business by an investor before making an investment.
Equity Financing: Selling ownership shares in your company to investors in exchange for capital.
Financial Projections: Forecasts of a startup’s future revenue, expenses, and profitability.
Financial Modeling: The process of creating a mathematical representation of a company’s financial performance.
Initial Public Offering (IPO): The first time a company offers its shares to the public on a stock exchange.
Key Performance Indicators (KPIs): Measurable metrics that track a startup’s progress towards its goals.
Minimum Viable Product (MVP): A basic version of your product with enough features to gather validated learning from customers.
Pitch Deck: A concise presentation used to introduce your business concept to potential investors.
Return on Investment (ROI): The profit gained on an investment compared to the cost of the investment.
Seed Funding: Early-stage funding from angel investors or venture capital firms to help startups validate their concept and build an MVP.
Series A, B, C Funding: Stages of venture capital funding for startups with increasing investment amounts and stricter investor requirements at each stage.
Venture Capital (VC): Firms that invest in high-growth startups in exchange for equity ownership.