Glossary of financial terms

See Business Incubators

Occurs when a company registers its stock with a public recognized Stock Exchange and can sell equity ownership in the company to the public. Access is gained to a source of capital, which did not previously exist. There are numerous reporting and compliance issues to deal with from this point forward which could involve a considerable expense. Stock that is publicly traded on a Stock Exchange provides the owner with an established price and a market in which to buy or sell.

A person who through employment, function or other relation has access to non public available knowledge and information about a company and its securities which has influence on the price of such securities.

Insiders who trade in securities based on insider knowledge and information.

An institution such as an investment company, mutual fund, insurance company, pension fund or endowment fund, which generally has substantial assets and experience in investment. In many countries, securities laws do not protect institutional investors as fully because it is assumed that they are more knowledgeable and better able to protect themselves.

Patens, copyrights trademarks, trade secrets and similar rights in ideas, concepts etc.

Maturing company where a future leveraged buyout, merger or acquisition and/or initial public offering is becoming a viable option. It is a stage in the maturity of a business where the business seeks to expand its product line, expand its facilities, identify and penetrate new markets and continue the growth phase. Further capitalisation and credit financing may be required to fund this additional growth.

Compounded rate of return on an investment that an investor receives on an investment at the time of sale or other exit.

Entrepreneurial-based activities within a corporation that receive organizational support and resources commitments for the purpose of an innovative new business experience within the organization itself.

Entrepreneurial-based activities within a corporation that receive organizational support and resources commitments for the purpose of an innovative new business experience within the organization itself.

Transfer of capital or other assets to an enterprise in order to secure a profit for the investor.

Acts as underwriter or agent, serving as intermediary between an issuer of securities and the investing public. In addition to new securities offerings, investment bankers handle the distribution of blocks of previously issued securities, either through secondary offerings or through negotiations, maintain markets for securities already distributed, and act as finders in private placements of securities. Many investment-banking firms support broker-dealer operations, serving both retail and wholesale clients in brokerage and advisory capacities. In addition to underwriting and brokerage operations, investment-banking firms are becoming more involved in other financial services and financing transactions as defined by each individual firm. Some firms become involved in brokerage operations specialising in private placement transactions and other investment strategies similar to venture capital firms. In some instances, a firm's minimum investment figure will relate to private placements rather than public offerings or secondary public offerings. Firms specialising in "pink sheets" will usually become involved in riskier high-growth businesses and have a lower minimum financing requirement. They will, however, expect high returns on their investments and often require that a company become publicly traded if it isn't currently a public company. (See also Broker/Dealers

To maintain a strong share price, your public company must develop and implement a strong stock support plan. The costs of implementing your stock support plan are among the major disadvantages of being a public company. Because you have a better mousetrap, the world won't beat a path to your door. You must convince investors to buy and hold your stock.

See Initial Public Offering

The total number of shares the company has issued. Plus, any shares that the company may have a contractual obligation to issue, such as shares that could be issued as a result of the sale of options and warrants.

The legal entity offering its securities for sale, whether it is a corporation, partnership, trust or other appropriate entity.