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To better understand the terms referred to in our initiatives, please read the glossary.


A programme that start-ups can apply to that provides mentorship, more often than not for a chunk of equity, in an effort to help the company grow. Most accelerators are geared towards helping early-stage companies preparing for Venture Capital funding.
Balance Sheet
An accounting document that reflects the financial situation of a company at a given point in time, recording what it owns and its rights (assets), equity capital, and its obligations to third parties (liabilities).
Barriers to Entry
Obstacles that companies face when entering a given market, created by companies that are already established, with the purpose of preventing new companies from establishing themselves and reducing the sector´s profitability. Barriers to entry include, for example, brands, patents, exclusive rights to a distribution channel, large investments required to get established.
Barriers to Exit
Difficulty in leaving the industry when there are low or even negative returns. For example, industries that require investment in specialised assets tend to have greater barriers to exit.
A market reference and process by which a company compares and measures its current relative success. An investor references a company's growth by determining whether or not they have met certain benchmarks, i.e. market references. For example, company A has met the benchmark of having X amount of recurring revenue after 2 years in the market.
The creation of a business using own resources, without investors.
Board of Directors
A group of individuals, elected by stockholders, chosen to oversee and manage the affairs of a company. A board typically includes investors and independent members with industry high profiles and track records. Not all start-ups have a board, but investors typically require a board seat after investing.  
Break-even (Critical Point)
Point from which the company begins to show positive operating results. The lower the critical point of a company, the easier it will be for the company to reach it and the lower its economic risk will be.
Bridge Loan
A short-term loan that serves as “bridge” financing before long-term debt or equity investment is secured.
A regular budget, usually annual, prepared by a company, that includes variable costs, revenues and expenses.
Burn Rate
A time-based metric reflecting how much cash a company consumes in any given time-frame. Burn rates are typically calculated over annual or monthly periods, and in some cases can be calculated on a weekly or daily basis.
Business Angels (BA)
An individual investor who directly invests his or her own money predominantly in companies in the seed or start-up phase. BAs make their own investment decisions and are financially independent, in other words, a possible total loss of their investments will not significantly change the economic situation of their assets. BAs, in addition to investing, also monitor and provide strategic support to entrepreneurs. They are also known as Informal Venture Capital Investors.
Business Model
The way in which the company is going to create value, deliver it to its clients and generate income in the process.
Business to business (B2B)
A business that is targeting another business with its product or services. B2B technology is also sometimes referred to as enterprise technology. This is different from B2C which stands for business to consumer, and involves selling products or services directly to end-users.
Financial resources currently available for the investment of funding operations. Entrepreneurs raise capital to start a company and continue raising capital to fuel growth.
Capped Notes
Refers to a top level limit placed on investor notes in a round of financing. For example, entrepreneurs and investors agree to place a “cap” on the valuation of the company at which notes can be converted into equity. This means investors will own a certain percentage of a company relative to that cap when the company raises another round of funding, if the round is priced higher than said cap. Uncapped rounds are generally more favourable to entrepreneurs. To avoid doubt, entrepreneurs should be aware that the cap is not typically the only pricing reference on a convertible note.
Cash Flow
Amount of cash that is received and paid by a business during a given period.
Development process of a solution, in which all interested parties are invited to play an active role, in an equal and reciprocal relationship.
Competitive Advantage
The advantage a company has over its competitors, generally shown by its superior performance.
Direct: Competition between two companies that sell the same product in the same market.
Indirect: Competition between two companies that sell different products, but which can be used to satisfy or perceived by customers as satisfying the same need in a sufficiently acceptable way.
Convertible Debt
Debt that can be converted to equity based on certain conditions, typically a pre-defined valuation and date.
Office space shared by entrepreneurs. The aim is to share all the resources a company or project needs to operate, which, in most cases, allows for a more informal environment.
The process of funding a venture (equity crowdfunding) or production of a product (reward crowdfunding) by raising small individual amounts of capital from a large number of people (the 'crowd'), usually through an online platform.
Production model that uses the intelligence, collective knowledge and volunteers, generally spread across the Internet, to solve problems, create content and solutions or develop new technologies - and also to generate the flow of information.
Current Assets
Assets that are not long lasting or permanent in a company. They are short-term assets and of greater liquidity, such as deposits, accounts receivable and inventory.
Current Liabilities
The company's debts, which should be paid within less than twelve months.
Concept used to specify the time limit for a particular action.
Deal Flow
The rate at which investment projects and business proposals are received by investors, like Business Angels, or Venture Capital Firms. It is an indication of the vitality of the business in this sector of activity.
Due Diligence
An analysis process carried out by a person or entity prior to entering a business agreement, namely before making an investment in a firm or company, to minimise risk.
Early Stage
Initial phase in the life cycle of a company that includes the Seed and Start-up phases and, in general, runs until there are recurring sales of products/services.
Early Stage Financing
Financing of companies that are setting up or at a stage where they have recently started operating and the sales volume is still non-existent or very low.
EBITDA (Earnings before Interest, Taxes, Depreciation and Amortization)
A cash flow measurement that takes operational revenue less expenses without including interest, taxes, depreciation and amortization. It is widely used as a ballpark proxy for operational cash-flow (assuming no working capital).
The term enterprise typically refers to a company or business (i.e. an enterprise tech start-up is a company that is building technology for businesses).
Enterprise Value
A measure of a company’s value calculated as market capitalisation, including all debt and equity interests, minus excess cash.
An individual who starts a business venture, assuming all potential risk and reward for him or herself.
Entrepreneur in residence (EIR)
A seasoned entrepreneur who is employed by a Venture Capital Firm to help the firm vet potential investments and mentor the firm's portfolio companies in different aspects of operations and strategy.
Equity Investment
Capital made available to a company, which is invested, directly or indirectly, in exchange for a corresponding share in the company.
The sale of participations held through an intermediary or to another investor, including trade sale, amortisation loss, reimbursement of shares/loans, the sale to another financial intermediary or to another investor, the sale to a financial institution and the selling of shares to the public, including an initial public offering (IPO).
Fixed Tangible Assets
Resources owned by the company, that are permanent or constant, not meant to be sold or transformed as a result of the company’s regular activities.
The creator of the company, their partners, if they exist, are the co-founders.
An investment vehicle comprising capital commitment. Funds typically have specific investment theses, including sectors, regions and deal amounts that they target for their investments.
Fund of Funds
A fund that invests in other funds.
The process of seeking capital commitments from investors.
Institutions or initiatives that provide start-ups with the opportunity to develop their business ideas, giving them practical support in terms of infrastructure and advice, for a specific period of time. It is an analogy with the growth of infants: those that are born fragile stay in the incubator until they are ready to hold their own.
Implementation of a new idea or improvement of a solution through a new product, process, organisational or marketing method, with the purpose of increasing performance, knowledge and competitive position.
IPO (Initial Public Offering)
Initial Public Offering. The first sale of shares of a company when it goes public and starts selling shares on the stock exchange.
Intangible Assets
Identifiable non-monetary assets that lack physical substance or are intangible, such as software, licenses and patents.
Joint Venture
Participation of several companies in the capital of a legally independent economic unit, in order to develop a productive and/or commercial activity, where the respective assets, returns and risks of the business are shared.
Key Performance Indicators (KPIs)
A set of measures that can be used to gauge the performance and state of a given business or sector. KPIs can include revenue growth measures, monthly active user growth rates for certain technology firms or leverage ratios, among many others. Depending on a given business’s strategic and operational initiatives, KPIs hold different priorities and relevance on managing and monitoring performance.
Lead Investor
An entity or individual that makes the largest individual investment in a given round of funding for a company. As the primary financier for the round, the lead investor determines the current valuation of the company and typically the majority of the relevant terms of the financing.
License Agreement
An agreement by which a company grants another the right to use certain know-how and/or to exploit industrial property rights in exchange for payment, usually through royalties.
Limited Partner (LP)
An investor, usually an institution or accredited investor, that contributes capital to a private equity limited partnership.
The process of selling assets in order to pay creditors (and potentially shareholders) followed by the closing of the company.
Liquidity Event
The process of selling equity in an investment in order to realise an investment and return capital to limited partners.
Market Niche
Small market segment made up of a perfectly identifiable group of consumers with a homogeneous profile.
Market Potential
The amount that a specific segment is willing to pay for the product/service.
Market Segment
Group of individuals with similar needs and preferences in terms of consumption.
Market Share
Percentage of the market that a company or product/service has, calculated by dividing the sales of the product/service by the total sales of the market.
MBO (Management Buy-Out)
Acquisition of a company by its management, thanks to external financing.
An informal meeting to promote the exchange of ideas between multiple players in the business world, from CEOs to programmers, including investors.
A business advisor. Has a key role in the validation process, start or development of a start-up, when the entrepreneurs need it most. They are also well-known individuals at events and start-up competitions, advising new entrepreneurs on the development of ideas and their business model. Having a good mentor can make all the difference in an entrepreneur's success.
Mezzanine Financing
A type of hybrid capital typically used to fund adolescent and mature cash flow positive companies. It is a type of debt financing, but which also includes embedded equity instruments or options. Companies at this level, which are no longer considered start-ups but have yet to go public, are typically referred to as "mezzanine level" companies.
Minimum Viable Product (MVP)
Consists of a simpler version of a product, created with minimal effort and resources, used to test and validate the business.
NDA (Non-Disclosure Agreement)
A confidentiality agreement which the entrepreneurs sign with the creditors or partners to ensure that their idea is not copied or manufactured by others. 
A network of contacts. Expanding it is a fundamental exercise for any new entrepreneur who wants to make their project known.
Pari Passu
A Latin term that means “of equal step”, “simultaneously”, “equal footing”, “at the same time”, in financial terms, in equal standing, where all parties are treated in the same manner. For example, when stated that “investors shall receive/pay pari passu”, it means that they will receive/pay in proportion to their investment.
Pitch (Elevator Pitch)
A summary communication, usually 3 to 5 minutes, of the value proposition of a business idea, with the purpose of finding a potential investor or partner.
Pivot, or pivoting, means to redirect the company's business model in search of more profitable exits, while keeping one foot firmly in place so as not to lose the position already gained.
Portfolio Company
A company that has received an equity investment from a specific Venture Capital or Private Equity firm.
The act of developing the offer and the brand of the company to take a prominent place in the minds of the target-consumers.
Pre-/post-Money Valuation
Pre-money valuation refers to the value investors give a company immediately before they add their capital infusion; 
Post-money valuation is how much the company is valued at after the capital infusion and, typically, is the sum of the pre-money valuation and the capital infusion. Most references are to a company's post-money valuation. Naturally Pre-money can be determined by subtracting the capital infusion amount from the post money valuation.
Product-Market Fit
A market demonstration that there is perceived value and acceptance to buy the product or service provided by the company by potential customers.
Profit and Loss Account
An accounting document that shows the results (profits or losses) obtained by a company in a specific period.
Proof of Concept
A demonstration of the technical feasibility of a concept or idea that a startup is based on.
Pro Rata Rights
Also known as supra pro rata rights. Pro rata is from the Latin 'in proportion.' A VC with supra pro rata rights has the option of increasing his or her ownership of a company in subsequent rounds of funding.
Quasi-Equity Investment
Type of financing not classified as pure equity capital or debt, with a greater risk than senior debt and a risk that is lower than ordinary capital, where the return for the holder is predominately linked to the profit or loss of the undertaking target-company, which is not guaranteed in the event of default. The quasi-equity investments may be structured as a debt, unsecured and unsubordinated, including mezzanine debt and, in some cases, convertible into equity, or as preferred equity.
A corporate reorganisation of a company's capital structure, changing the mix of equity and debt. A company will usually recapitalise to prepare for an exit, lower taxes, or defend against a takeover.
Return on Investment (ROI)
This is the much-talked-about "return on investment." It's the money an investor gets back as a percentage of the money he or she has invested in a venture. For example, if a VC invests €2 million for a 20 percent share in a company and that company is bought out for €40 million, the VC's return is €8 million.
Rounds of investment during the course of the start-up. Following seed capital, the companies move on to the first round, Round A, then on to Round B, and so on.
The market that a start-up company product or service fits into. Examples include: consumer technology, cleantech, biotech, and enterprise technology. Venture Capitalists tend to have experience investing in specific related sectors and thus tend not to invest outside of their area of expertise. 
Seed Capital
The amount that is raised when a business is still in its initial stage, in order to take its first steps in the market. At this stage, there are seed rounds, the initial rounds of investment, to raise the first external cash for the start-up (seed money).
Seed Capital Financing
Financing for research and development of the initial concept, before the business has reached the Early Stage.
Seed Stage
The stage prior to the official start of the company, where the initial concept of the product or service is assessed and developed.
Refers to the specific round of financing a company is raising. Venture rounds that typically occur around certain milestones: a Series A round is raised after a seed investment has taken a company as far as it can go; a Series B may be when the company is close to reaching profitability but needs capital for hiring/development needs; Series C and D+ rounds are commonly known as late-stage rounds, and generally occur when a company has a defined business model that has taken hold, is making significant revenues and is looking to expand on a large scale.
Senior Debt
Debt that takes priority over other debt securities in the event of liquidation.
Software as a Service (SaaS)
A software product that is hosted remotely, usually provided over the Internet (also known as "in the cloud") that the customer pays a regular time-linked fee for using (not acquiring) – that can be terminated remotely in case of ceasing payment or contract termination (hence being a service like business model, however with a scalable profile).
Creation of a new independent company, with innovative products or services, initially generated from a project in an already existing parent company.
The stage of development a company is in. There is no explicit rule for what defines each stage of a company, but it tends to be categorised as early stage, mid-stage and late stage.
A start-up is a new company, or even one in the embryonic stage or still being constituted, which has promising projects linked to the research and development of innovative ideas. There is a high risk involved in the business. However, despite this, they are ventures with low initial costs and are highly scalable, in other words, they have high growth potential when things go well. Eric Ries, author of Lean Startup, defines a start-up as “a group of people in search of a repeatable and scalable business model, working under conditions of extreme uncertainty".
Start-up Stage
When the company starts and it begins to develop its products or services for commercialisation.
Tangible Assets
Assets consisting of land, buildings and plants, machinery and equipment.
Target Market
A group of consumers to whom the company decides to direct their products, services or ideas with a strategy aimed at meeting needs and preferences.
Term Sheet
A non-binding agreement that outlines the major aspects of an investment to be made in a company. A term sheet sets the groundwork for building out detailed legal documents.
Quantitative evidence of market demand. It is proof that the product or service is necessary and can be expressed, as appropriate, using different metrics (revenues, margins, active members, registered users, traffic).
A portion of an investment more commonly seen/used in venture rounds. In many agreements (especially in healthcare), a second portion/tranche/instalment of a round is made upon specified milestones, such as regulatory approval. Every tranche or instalment of a round will be part of the same round.
Start-ups with a valuation of over one billion Dollars (about 900 million Euros), a club which has just under 200 companies worldwide.
How much a start-up would be worth if it were sold. Generally referred to when a start-up has just received funding.
Value Chain
A set of tasks of a specific process resulting in the creation of value for the final recipient.
Value Proposition of the Business
Value perceived by the clients or potential clients related to a differentiated product/service, that addresses a problem and satisfies an identified need. May be applied by to an organisation or just to some products/services, defined through the identification and creation of benefits offered to the clients or potential clients, which determines its value positioning in relation to the competition or potential competitors.
Venture Capital
Funds to support small and medium companies, already established and with growth potential. With an average duration of five to seven years, the invested resources finance the first expansions, taking the business to new heights in the market.
Venture Capital Firms
Financial operators which manage Venture Capital Funds.
Venture Capital Fund (VCF)
Fund created to make Venture Capital investments.
Venture Capital Investment
“According to Article 3 of the Legal Framework for Venture Capital, Social Entrepreneurship and Specialised Investment: 1 - Venture capital investment is considered the acquisition, for a limited period of time, of equity instruments and instruments of borrowed capital in companies with high growth potential, as a means to benefit from the respective valorisation; 2 - The Venture Capital Investment Firms and the Venture Capital Funds are alternative closed investment undertakings which together are called «venture capital investment undertakings».”
When an employee of a company gains rights to stock options and contributions provided by the employer. The rights typically gain value (vest) over time until they reach their full value after a pre-determined amount of time. For example, if an employee was offered 200 stock units over 10 years, 20 units would vest each year. This gives employees an incentive to perform well and stay with the company for a longer period of time.
Working Capital
Difference between the current assets and the short-term liabilities of a company.