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Those who are making investment decisions on their own behalf, i.e. selecting investment types and making trades themselves without the help of a financial adviser.
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A fungible, negotiable financial instrument that holds some type of monetary value. A security can represent ownership in a corporation in the form of stock, a creditor relationship with a governmental body or a corporation represented by owning that entity's bond; or rights to ownership as represented by an option.
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Also known as seed capital or seed money, is the early-stage funding provided to a startup to help it get off the ground before the company has developed a product or service.
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The part of the financial industry that is involved with the creation, promotion, and sale of financial instruments to the public market.
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The first round after the seed stage, typically used to fund the expansion of a company. In this round, it's important to have a plan for developing a business model that will generate long-term profit; usually raising between $2 million and $15 million.
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A measure of fund’s risk-adjusted performance. It is calculated by taking a fund’s annualized return, removing the risk-free rate (typically the 3-month Treasury rate), and dividing this excess return by the fund’s standard deviation.
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A strategy in which one investor allows a second investor to control how to invest their capital. A sidecar investment usually occurs when one of the parties lacks the ability or confidence to invest for themselves.
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The minimum amount of capital that a company is seeking to raise in a crowdfunding campaign.
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A distinct legal entity generally established to isolate financial risk and protect the parent company's assets by housing specific assets, liabilities, or activities, while providing operational and financial independence.
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A measure of volatility that is often used as a proxy for risk. A volatile fund or security has a higher standard deviation, while the deviation of a more stable investment is lower. Standard deviation calculates all upside and downside volatility equally, including returns above the average, or mean.
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A contract outlining the terms and conditions of an investment, including the amount of capital being invested and the ownership stake being acquired.
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The amount, including interest, owed by investors who do not participate in the first closing of a fund to compensate initial investors for their pro rata share of previously funded capital to a fund.
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A group of investors or financial institutions that jointly underwrite, fund or participate in a single investment or financing transaction. A temporary alliance of businesses that joins together to manage a large transaction, which would be difficult, or impossible, to effect individually.
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The risk that is inherent in the entire market or economy, affecting all investments to some degree, as opposed to specific risks associated with a particular investment.
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A type of equity financing that is used to help early-stage startups get off the ground. It is typically the first round of funding that a startup receives, and it is used to cover the costs of things like product development, marketing, and hiring.
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A market where investors buy and sell securities they already own.
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Equity that is received in exchange for the labor or the commitment made by the equity recipient.
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A type of investor, usually a corporation, who invests in a startup with the goal of forming a partnership for mutual business advantages.
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A provision in a law or regulation that affords protection from liability or penalty under specific situations or if certain conditions are met.
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Debt that takes priority over other unsecured or otherwise more “junior” debt owed by the issuer.
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A loan or security that ranks below other loans or securities with regard to claims on assets or earnings.
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The process of identifying potential investments for a fund.
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The process of evaluating potential investments against a set of predefined criteria.
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The naming convention for rounds of funding in the startup ecosystem.
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The process of adjusting a mutual fund’s net asset value to effectively pass on trading costs to the investors in the fund who are buying or selling shares.
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A company that builds startups using its own ideas and resources.
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State-owned investment fund investing in real and financial assets such as stocks, bonds, real estate, precious metals, or in alternative investments.
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A unique form of limited liability company (“LLC”) in which the articles of formation specifically allow for unlimited segregation of membership interests, assets, and operations into independent series.
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The U.S. governmental agency responsible for enforcing federal securities laws, proposing securities rules, and regulating the securities industry.
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The act of loaning a stock, derivative or other security to an investor or firm.
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A condition of slow economic growth and relatively high unemployment, or economic stagnation, accompanied by rising prices, or inflation.
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A public financial market in which financial instruments or commodities are traded for immediate delivery.