Category: Forms of financing

Definition and function of revenue-based financing Revenue-based financing is an innovative form of financing in which companies receive capital from investors and in return transfer ...

Definition and objective of public funding Public funding is financial support provided by government institutions at federal, state or European Union level. The aim of ...

Definition and economic purpose of factoring Factoring refers to a special form of financing in which companies sell their existing trade receivables to a third ...

Definition and objectives of incubator programs An incubator program supports start-ups and founding teams at a very early stage of development, often before a market-ready ...

Definition and objectives of accelerator programs An accelerator program is a time-limited, intensive support program for start-ups that aims to prepare young companies for rapid ...

Definition and functioning of a family office A family office is a professional organization that specializes in the comprehensive management of wealthy families' assets. These ...

Definition and basics of private equity Private equity refers to off-market equity capital that is typically invested in established, financially stable companies. The aim is ...

Definition and functioning of a SPAC A Special Purpose Acquisition Company (SPAC) is a listed shell company that is founded with the sole purpose of ...

Definition and basics of an IPO An initial public offering (IPO) describes the first-time issue and public placement of shares of a previously private company ...

A Simple Agreement for Future Equity (SAFE) is a financing instrument that was developed to offer start-ups a simpler and more flexible way of raising ...

A cap table (capitalization table) is a tabular overview of the ownership structure of a company, especially a start-up. It shows who holds which shares ...

Non-Participating Preferred, also known as Straight Preferred, is a form of preferred stock commonly used in startup and venture capital financing. Unlike Participating Preferred, this ...

Participating preferred, also known as participating preferred stock, is a special form of preferred stock commonly used in startup and venture capital financing. This class ...

The term "bad leaver" is used in the context of startup companies and participation agreements to describe scenarios in which a founder, employee or investor ...

Post-money valuation is a fundamental concept in startup financing and refers to the value of a company immediately after an investment or financing round. It ...

The term "good leaver" is used in the context of startup companies and participation agreements to describe scenarios in which a founder, employee or investor ...

Pre-money valuation is a key term in startup financing and refers to the value of a company immediately before an investment or financing round. It ...

A down round is a financing round for a startup or private company in which the valuation of the company is lower than in the ...

Reverse vesting is a contractual agreement that is often used in start-ups to ensure that founders and key employees remain committed to the company in ...

Bridge financing is a short-term form of financing that companies or investors use to bridge a time gap between two financing events. This type of ...