5 Finance Start-Up Terms Worth Remembering

When the world is going through one of the difficult period and one question that are being posed in front of every company is that whether the company would be able to sail through this pandemic. Amidst of the ongoing pandemic when entire start-up ecosystem is also facing an existential crisis there are few terms relate to start up ecosystem that are being tossed up every now and then. Let us have a look at some important terms related to start-up ecosystem.

1.      Venture Capitalist

Venture capitalists are an investor who provides capital to firms that exhibit height growth potential in exchange for an equity stake. VCs targets firms that are at the stage where they are looking to commercialise their idea. But that is not always a success in fact VCs experience high rates of failure  due to the uncertainty that is involved  with  new and unproven companies.

2.      Angel Investor

An angel investor is a high net worth individual who puts their own finance into the growth of a small business in the early stage as seed funds for debt or equity ownership. They invest in the formative stages of the start-up.

3.  Seed Capital

Seed capital refers to the funding required to get a new business started.  The first funding which usually comes from the business owner and perhaps friends and family. Seed capital funding is considered high risk because the business is not fully functional and has no track record.

4.      Unicorn

A start-up company that is valued at over $1 billion is called a unicorn. This term was first coined by venture capitalist Aileen Lee, founder of CowboyVC, a seed stage venture capital fund based in California.

5.      Bootstrapping

bootstrapped business is a company without outside investment funds. Entrepreneurs refer to bootstrapping as the act of starting a business with no outside money, or at least, very little investment. The founding entrepreneur known as the bootstrapper and is the one sole investor in the beginning.  So, the bootstrap definition means to do something on your own.