Acquisition:
When a company buys another company, often to grow its business.
Amortising Loan:
A loan where you make regular repayments of capital and interest over an agreed period of time.
Annual Percentage Rate (APR):
The total cost you'll pay for borrowing money, including both the interest rate and any additional fees, shown as a yearly percentage.
Annual Recurring Revenue (ACR):
The amount of revenue a company expects to repeat annually.
Assets:
Items a company owns that have value, like money, equipment, or property.
Assets Under Management (AUM):
The total value of investments a VC firm manages.
Average Revenue Per User (ARPU):
The value each customer brings the business.
Balance Sheet:
A financial snapshot that shows what a company owns (assets), owes (liabilities), and what's left over (equity).
Base Rate:
The starting interest rate that banks use to determine their loan and overdraft rates.
Bootstrapping:
Starting a business using your own money, or business profits, without borrowing from others.
Business Angels:
People who invest their own money into small businesses, in exchange for shares, to help them grow.
Business Plan:
A detailed document that explains what a business does, its goals, and how it plans to achieve them.
Cap Table:
A table that shows who owns how much of a company's shares.
Capital Expenditure:
Money a company spends on things that will help it make money in the long run, like buying new equipment.
Cashflow:
The movement of money in and out of a business, through sales or money owed.
Collateral:
Something valuable that you give to a lender, as a promise to pay back a loan.
Corporation Tax:
The money a company pays to the government based on its profits.
Crowdfunding:
Many people giving small amounts of money, in exchange for shares, to help fund a project or business.
Debenture:
A loan agreement in writing between a borrower and a lender that is registered at Companies House. It gives the lender security over the borrower’s assets.
Debt:
Money that a person or company owes to someone else.
Debtor:
Someone who owes money to another person or company.
Depreciation:
An accounting method which recognises the reduction in an assets value over time.
Distributions to Paid-In Capital (DPI):
The amount of capital returned to investors divided by the amount of capital paid in.
Dividend:
A portion of a company's profits distributed to its shareholders.
Due Diligence:
The process of investigating a potential investment opportunity.
EBITDA:
Short for ‘earnings before interest, tax, debt, and amortisation, EBITDA is a measure of a company's earnings. It shows how much money it makes before taxes and other expenses.
Economies of Scale:
When a company makes more things, it can often make them cheaper per individual item.
Enterprise Investment Scheme (EIS):
A way to encourage people to invest in small businesses by providing tax efficient benefits.
Enterprise:
Another word for a business or company.
Equity:
Ownership in a company, usually represented by shares.
Financial Conduct Authority (FCA):
A government agency that regulates financial service providers to protect consumers.
Financial Management:
Taking care of money-related matters in a business.
Fintech:
Using technology to provide financial services, such as an app to make payments, loans, or investing.
Fixed Cost:
Expenses that stay the same no matter what.
Inflation:
When the prices of goods and services go up over time.
Insolvency: When a person or business can't pay their debts.
Intellectual Property:
Ideas, inventions or creative work that can be legally protected, like patents and copyrights.
Investment:
Putting money into something with the hope of making more money in the future.
Investors:
People or companies that provide money to support a business in exchange for ownership or a share of the profits.
Invoice Factoring:
Selling your unpaid invoices to a funder in return for investment.
Operating Profit / Loss:
The money a company makes or loses from its main activities.
Overdraft:
If you borrow more money than you have in your bank account, you may enter an overdraft and have to pay interest on the amount you are overdrawn by.
Overheads:
Regular operating costs a business must pay that do not directly generate any revenue.
Patent:
Legal protection for a new invention.
Pay As You Earn (PAYE):
A system where taxes are taken out of wages by employers.
Personal Guarantees:
A promise by an individual to pay back a loan if the business cannot.
Pitch Deck:
A presentation that explains a business idea to potential investors.
Pre-money Valuation:
How much a company is worth, often created before seeking investment.
Pre-seed:
The very first stage of funding for a new business idea, typical investors will be friends and family.
Post-money Valuation:
How much a company is worth after getting new investment.
Product-Market Fit:
When a company's product satisfies a strong market demand.
Profit and Loss Account:
A statement showing a company's income and expenses to calculate profit or loss.
Security:
Something valuable you give to a lender to promise repayment of a loan.
Seed:
Often referred to as the first real funding stage – designed to get a venture started. Typical investors will be business angels and crowd funders.
Seed Enterprise Investment Scheme (SEIS):
A way to encourage people to invest in small businesses by providing tax efficient benefits.
Series A Funding:
The first significant round of investment following on from seed funding, will typically involve larger venture capital organisations.
