MidMarketWiki - Alphabetical

The process by which a business receives a state charter, allowing it to become a corporation. Many corporations choose Delaware because its laws are business-friendly and up to date.

A company or facility designed to host startup companies. Incubators help startups grow while controlling costs by offering networks of contacts and shared backoffice resources.

The terms and conditions between a bond issuer and bond buyers.

Initial public offering (IPO) -- the first offering of stock by a company to the public. New public offerings must be registered with the Securities and Exchange Commission. An IPO is one of the methods that a startup that has achieved significant success can use to raise additional capital for further growth. See Qualified IPO.

A round of financing in which the investors are the same investors as the previous round. An inside round raises liability issues since the valuation of the company has no third party verification in the form of an outside investor. In addition, the terms of the inside round may be considered self-dealing if they are onerous to any set of shareholders or if the investors give themselves additional preferential rights.

Professional entities that invest capital on behalf of companies or individuals. Examples are: pension plans, insurance companies and university endowments.

Nonphysical assets, including but not limited to franchises, trademarks, patents, copyrights, goodwill, equities, securities, and contacts as distinguished from physical assets such as facilities and equipment.

The use or uses of a Valuator's reported appraisal, consulting, or review assignment opinions and conclusions as identified by the Valuator based on communication with the client at the time of the assignment.

The client and any other party as identified, by name or type, as users of the appraisal, appraisal consulting, or appraisal review report, by the appraiser on the basis of communication with the client at the time of the assignment.

Earnings before interest and taxes (EBIT) divided by interest expense. This is a key ratio used by lenders to assess the ability of a company to produce sufficient cash to pay its debt obligation.

Internal rate of return (IRR) -- the interest rate at which a certain amount of capital today would have to be invested in order to grow to a specific value at a specific time in the future.

The fundamental ideas which determine the types of investments that an investment fund will choose in order to achieve its financial goals.

IPO -- see Initial public offering.

See Internal rate of return.

The company that chooses to distribute a portion of its stock to the public.