Barrier to entry: a condition that makes it difficult for competitors to enter the market; e.g. patent, trademark, high initial investment requirement.

Blockbuster: drug with $1 billion or more in sales.

Bootstrap: starting a business with little or no external funding.

Bridge loan: a short-term, high-interest loan provided by venture capitalists to companies in dire need of cash.

Burn rate: The rate at which an unprofitable company is going through its available money.

Competitive advantage: an advantage that a firm has relative to competing firms; may be in the form of intellectual property, expertise, partnerships, assets, etc.

Controlling interest: ownership of more than 50 percent of a company’s voting shares.

Convertibles: Securities (usually bonds or preferred shares) that can be converted into common stock.

Cooperative research and development agreement (CRADA): an agreement enabling federally funded laboratories to perform for-profit contract work for commercial firms.

Cross-licensing: agreement in which two or more firms with competing and similar technologies strike a deal to reduce the need for legal actions to clarify who is to profit from applications of the technology.

Dilution: the decrease in relative ownership among existing investors as additional shares are issued.

Discovery rights: selling only research findings while keeping rights to all the knowledge that is uncovered along the way.

Down round: a financing event in which a company is valued lower than it was previously.

Due diligence: the process by research is conducted to determine the value of an investment, licensing agreement, merger, or other similar activity.

Elevator pitch: a short, typically less than two-minute, summary used to quickly describe a business to investors

Dumb money: funding from investors who cannot provide additional benefits such as guidance or networking.

Equity investment: an investment buying partial ownership of a company.

Exit: the means by which investors gain a return on their investment, commonly through sales of shares on public markets or acquisition by another company.


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