Initial Public Offering (IPO): the initial sale of shares of a
private company on public markets, turning it into a publicly-traded
Intellectual property: intangible assets such as patents,
trade secrets, trade names, etc.
License: an agreement to grant rights to a patent or tangible
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
Seed financing: capital furnished to prove the feasibility of
a concept or invention.