15 Venture Capital Terms Every Entrepreneur Should Know

If you're thinking of securing start-up venture capital funding for your seed stage, early stage or growth company it's important to start with the basics -- 15 venture...

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Talk of venture capital deals, the latest acquisitions, and young startups raising millions in their latest funding round seem to dominate the headlines as of late.

Does every startup need VC funding – no. But depending on your end goal, it’s a viable path. “Just look at Twitter … And look at all the other micro-blogging companies out there. No offense to Twitter, but what’s the difference between Twitter and all these other micro-blogs? About $20 million in venture capital.”

So if you’re thinking of securing start-up venture capital funding for your seed stage, early stage or growth company it’s important to start with the basics. Here are 15 venture capital terms every entrepreneur (interested in raising capital) should know.

1. Pitch:

Pitch is the set of activities intended to persuade someone to buy a product or take a specific course of action.

2. Angel Investor:

Angel or Angel Investor is an individual who provides capital to one or more startup companies. Unlike a partner, the angel investor is rarely involved in management. Angel investors can usually add value through their
contacts and expertise.

3. Venture Capitalist:

Venture Capitalist is a term used of an investor who provides capital to either start-up ventures or support small companies who wish to expand but do not have access to public funding.

4. Seed Capital:

Seed Capital is the money used to purchase equity-based interest in a new or existing company. This seed capital is usually quite small because the venture is still in the idea or conceptual stage.

5. First stage capital:

First Stage Capital is the money provided to entrepreneur who has a proven product, to start commercial production and marketing, not covering market expansion, de-risking, acquisition costs.

6. Round of Funding:

Round of funding is the stage of financing a start-up company is in. The usual progression is from startup to first round to mezzanine to pre-IPO.

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