Initial Public Offering (IPO): the initial sale of shares of a private company on public markets, turning it into a publicly-traded company.

Intellectual property: intangible assets such as patents, trade secrets, trade names, etc.

License: an agreement to grant rights to a patent or tangible subject.

Market segmentation: the division of a market into distinct groups of buyers or decision makers.

Merger: the combination of two companies in which one acquires the other. A merger can be distinguished from consolidation, in which a new separate entity is created.

Mezzanine funding: Funding that generally leads to liquidity (IPO or merger) or commercial launch and eventual profitability.

Milestone: the completion of a specified phase in product development. Investors and alliance partners may use milestones to establish a timeline for investments or payments.

Pharmacoeconomics: Study of the cost-benefit ratios of drugs.

PIPE (Private Investment in Public Equity): purchase of discounted shares in a public company in which payment goes directly to the company rather than to existing shareholders.

Price elasticity: a measure of the change in demand in response to a change in price of a product or service. Low price elasticity indicates little change in demand; high elasticity indicates a relatively large change in demand.

Royalty: the payment of a percentage of sales as compensation to product developers, patent licensors, or even investors.

Ratchet: an anti-dilution provision where an investor is granted additional shares of stock without charge if the company later sells the shares at a lower price.

Return On Investment (ROI): profit (or loss) on an investment, often expressed as a percentage.

SBIR (Small Business Innovation Research): a funding program that encourages small business to explore their technological potential and provides the incentive to profit from its commercialization.

Scientific Advisory Board (SAB): a group of esteemed scientists and business professionals, independent from management, that provides objective feedback and guidance on a company’s progress and goals.

Seed financing: capital furnished to prove the feasibility of a concept or invention.


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