An individual who meets certain financial criteria as defined by the SEC, allowing them to participate in certain types of investments.
Anything that has value and can be owned or controlled to produce positive economic value. Examples of assets include stocks, bonds, fiat currencies, digital currencies, and physical property such as real estate, equipment or machinery.
A group of investments that share similar characteristics and behave similarly in the marketplace. Examples of asset classes include stocks, bonds, real estate, and commodities.
Individual investors who contribute capital towards a particular investment opportunity, led by the syndicate lead or the lead investor.
Bonds are a type of fixed-income security that represent a loan made by an investor to a borrower, typically a corporation or government entity. The borrower promises to pay the investor interest on the loan, and to repay the principal amount of the loan when it comes due.
A short-term financing option used to bridge a temporary gap in funding. It is commonly employed in situations where immediate capital is required, such as during acquisitions or to cover operational expenses. Such loans are typically provided by financial institutions and are secured against specific assets or the future inflow of funds. They offer short-term liquidity until a long-term financing solution is secured.
Designed to help entrepreneurs and early-stage companies grow and develop by providing resources such as office space, mentorship, education, and networking opportunities.
A cap table, short for capitalization table, is a document that outlines a company’s ownership structure, including the percentages of ownership held by different investors and shareholders.
Capital call is a request made by fund managers or a syndicate leads to its investors for additional capital contributions to the fund or investment syndicate. These calls are typically made when the fund needs more money to make investments or cover expenses.
Also known as carried interest, carry is a percentage of profits that the lead investor in an investment syndicate is entitled to receive after the investors have received back their initial investment.
A type of investment company that raises a fixed amount of capital through an initial public offering (IPO) and then trades like a stock on a stock exchange. Unlike mutual funds, closed-end funds have a fixed number of shares outstanding and are not obligated to redeem their shares at net asset value.
A type of financing where a business borrows money from investors with the option to convert the debt into equity in the future. This type of financing is often used by early-stage companies that are not yet ready for equity-based investments.
Deal flow refers to the rate at which investment opportunities become available to the members of an investment syndicate.
A type of organization that is run by computer code on a decentralized blockchain network. It allows for decentralized decision-making and management of funds, with members holding voting power proportional to their stake in the organization. DAOs have become popular in the cryptocurrency space as a way to manage and fund decentralized projects.
Refers to the decrease in the ownership percentage of existing shareholders in a company when new shares are issued. Dilution can occur when a company raises capital through the sale of additional shares or when stock options are exercised.
A provision in an investment agreement that ensures that an investor’s ownership percentage in a company is not reduced in subsequent funding rounds.
Payments made to shareholders by a company out of its profits, typically as a reward for owning the stock.
The process of evaluating a potential investment opportunity, including analyzing financial statements, market research, and other relevant information.
A type of ownership interest in a company, typically represented by stock shares. Equity represents a claim on the assets and earnings of the company. Investors who own equity are entitled to a portion of the company profits.
The plan for how and when an investor will sell their stake in a company and get the return on their investment.
Additional rounds of funding after a company has already received seed funding.
An individual or company responsible for managing an investment fund, such as a mutual fund or hedge fund. The fund manager is responsible for making investment decisions and managing the portfolio of investments held by the fund.
The managing entity or individual responsible for operating a venture capital fund. GPs are actively involved in sourcing and evaluating investment opportunities, making investment decisions, and managing the fund’s portfolio. They play a crucial role in the fund’s operations, communicating with Limited Partners, and often providing expertise and guidance to the portfolio companies.
Refers to all income earned before taxes or deductions. Adjusted gross income (AGI) is gross income minus certain deductions permitted by the Internal Revenue Service, such as contributions to retirement accounts. AGI is used to determine eligibility for various tax credits and deductions.
A significant change in a blockchain protocol that results in a permanent divergence from the existing blockchain. It occurs when the nodes of a network cease to agree on a given set of rules, leading to a split into two separate chains.
A type of investment fund that pools capital from accredited investors and invests in a wide range of assets, using a variety of strategies to generate returns. Hedge funds typically have more flexibility than traditional investment funds in terms of the types of investments they can make.
A hurdle rate is the minimum rate of return that an investor requires from an investment before they are willing to invest. It is often used in private equity and venture capital investments.
An ICO is a type of fundraising method that involves the creation and sale of digital tokens or coins. These tokens represent an investment in a new cryptocurrency or blockchain project and are often used to raise capital to develop the project.
A cryptocurrency fundraising method that involves launching a new token on a decentralized exchange (DEX) to raise capital for a project. Unlike initial coin offerings (ICOs) and initial public offerings (IPOs), IDOs are conducted directly on a DEX and allow for immediate trading of the newly issued token.
The first sale of stock by a company to the public. An IPO allows a company to raise capital by selling shares of stock to investors on a public exchange.
IRR is a financial metric used to evaluate the profitability of an investment. It represents the discount rate at which the net present value of all future cash flows from an investment equals zero.
Distribution of investment funds across different areas of the startup’s operations or growth strategy. In terms of investment portfolio, it refers to the process of allocating different asset classes or securities to achieve diversification, balance risk and increase return.
Financial institutions that provide a range of services to corporations and governments, including underwriting new securities offerings, providing advisory services for mergers and acquisitions, and trading securities on behalf of clients.
An entity that allows investors to pool their money together to invest in a particular asset or group of assets, such as stocks, bonds, real estate, or other types of securities. Examples of investment vehicles include mutual funds, exchange-traded funds (ETFs), and private equity funds.
Commonly abbreviated as an LP, the term Limited Partner refers to an individual or entity that invests capital in a venture capital fund. LPs provide the financial resources to the fund but typically have limited involvement in the fund’s management and decision-making. They assume the role of passive investors and share in the profits and losses of the fund based on their contribution.
The process of selling off a company’s assets in order to pay off its debts and distribute any remaining funds to shareholders.
The simplest, initial version of a product or a service that can be released to the market to validate the idea and gather feedback from early adopters.
A type of investment vehicle that pools money from many investors to purchase securities such as stocks, bonds, and other assets. Mutual funds are managed by investment professionals and offer investors diversification, liquidity, and professional management.
The software or component responsible for managing and controlling a node within the blockchain network. It provides the necessary functionality, including tasks such as validating transactions, maintaining a copy of the blockchain, and communicating with other nodes to achieve consensus.
A binding document that outlines the ownership and management structure of a legal entity, such as Special Purpose Vehicle. It typically includes information such as the members’ rights and responsibilities, profit and loss distribution, and rules for decision-making.
A brief presentation that entrepreneurs use to pitch their business idea to potential investors. It typically includes information about the company’s product or service, market opportunity, business model, team, and financial projections.
The valuation of a company after funding is received.
The valuation of a company before funding is received.
Funding typically provided by angel investors to help a startup get off the ground, before it’s ready for traditional seed funding. Pre-seed funding is usually used for things like product development, market research, and initial team building.
Investment firms that typically invest in private companies or buy public companies and take them private. They use their capital to acquire companies, improve operations, and ultimately sell the companies for a profit.
The process of dividing the profits generated by an investment among its investors according to their respective ownership shares or other agreed-upon terms. The distribution may be in the form of cash, stock, or other assets, and may be made periodically or upon the realization of the investment, depending on the investment agreement.
Return on Investment, a measure of the profitability of an investment.
A process by which companies or organizations invest time and money into developing new products, services, or processes. The goal is to create new and innovative solutions that can be commercialized and generate revenue.
Simple Agreement for Future Equity, a type of investment instrument that allows investors to invest in a company without a valuation.
Refers to the purchase or sale of previously issued securities from one investor to another, rather than a new offering from the issuer. In the context of venture capital and private equity, secondaries refer to the buying and selling of limited partnership interests in private equity funds.
Financial products that can be bought and sold, such as stocks, bonds, and options. They are used by investors to manage risk, generate income, and earn returns on their investments.
Seed funding is an early-stage financing round in which a company raises capital to fund initial development and launch of its product or service. Seed funding typically comes from angel investors, venture capitalists, or crowdfunding platforms.
Represents a unit of ownership in a company. When someone owns shares of a business, they are considered a shareholder and have a claim on a portion of the company’s assets and earnings.
A legal entity created solely for a specific investment purpose, often used to pool funds from multiple investors to invest in a single venture.
A time-limited, mentorship-driven program that provides resources and support to help early-stage startups grow and scale quickly. These programs typically offer business coaching, access to investors, networking events, and training sessions to help startups refine their business models and develop their products.
A type of security that gives holders shares of ownership in a business. The stock is also referred to as equity. The share is a unit of measurement for stocks.
A person or entity who takes the primary responsibility of negotiating the terms of an investment, conducting due diligence, and coordinating with other investors.
A document outlining the terms and conditions of an investment, including the amount of capital to be raised and the ownership structure.
A metric used to measure the performance of venture capital or private equity investments. It calculates the ratio of the total value of investments (including unrealized gains) to the total amount of capital contributed by investors. TVPI provides insights into the overall return generated by the investment relative to the initial capital invested. A TVPI ratio above 1 implies positive returns.
A term used to describe a privately held startup company that has reached a valuation of $1 billion or more.
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Investing in venture capital funds, vehicles, or companies is inherently risky and illiquid. It involves a high degree of risk and is suitable only for sophisticated and qualified investors. The performance of past deals or a lead investors’ track record is not a guarantee of future returns.
The information contained herein is provided for informational and discussion purposes only and is not intended to be a recommendation for any investment, service, product, or legal, tax, or financial advice of any kind, and shall not constitute or imply an offer of any kind.
All examples of past investments featured are purely for illustrative purposes only and do not reflect the entirety of investments made on the Unique.vc platform. There is no guarantee that any fund, syndicate, or company will achieve the same results.
Views expressed in “posts” (including blogposts, podcasts, videos, and social media) and those of the individual Unique.vc personnel or guest authors quoted therein and may not be the views of Unique.vc.
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