Barrier to entry: a condition that makes it difficult for
competitors to enter the market; e.g. patent, trademark, high initial
Blockbuster: drug with $1 billion or more in sales.
Bootstrap: starting a business with little or no external
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
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
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.