Entrepreneurship exam 3

angel capital/business angel

Wealthy individuals looking for investment opportunities, they engage in smaller financial deals and often prefer seed stage or start-up stage investments

crowdfunding

Seeks funding for ventures by raising monetary contributions from a large number of people, usually via the Internet

rewards crowdfunding

the entrepreneur provides a gift or incentive in return for a donation without incurring debt or sacrificing equity

equity crowdfunding

the entrepreneur shares equity in the venture, usually in its early stages, in exchange for the money pledged

debt financing

secured financing of a new venture that involves a payback of the funds plus interest

equity financing

money invested in the venture with no legal obligation to repay the principal amount or interest

finance companies

asset based lenders that lend money against assets such as receivables, inventory, and equipment

initial public offering (IPO)

when a privately owned company sells shares of its stock to the public for the first time

trade credit

credit given by suppliers who sell goods on account

venture capital

Venture capitalists evaluate new-venture proposals based on critical factors such as the timing of entry, key success factor stability, educational capability, and lead time

ways a trademark may be invalidated

• abandonment

• cancellation proceedings

• cleaning-out procedure

• generic meaning

bankruptcy

when a venture’s financial obligations are greater than its assets and unable to meet its obligations

Bankruptcy Act

a federal law that provides for specific procedures for handling insolvent debtors

B corporation

A new approach helps businesses tackle social and environmental issues. Traditional corporate laws and unclear standards often limit their ability to prioritize people, communities, and the planet, making it hard to tell genuine efforts from marketing.

claims

A series of short paragraphs in a patent application, each of which identifies a particular feature or combination of features that is protected by the patent

copyright

Provides exclusive rights to creative individuals for the protection of their literary or artistic productions. Duration is the life of the author plus 70 years

corporation

a separate legal entity apart from the individuals who own it

debtor-in-possession

company or individual that has filed for bankruptcy protection but keeps control of their assets and continues business operations during the bankruptcy process

fair use doctrine

Reproduction of a copyrighted work for purposes such as criticism, comment, news reporting, teaching, scholarship, or research is not an infringement of copyright

infringement budget

estimated costs a company sets aside to handle potential legal issues related to intellectual property (IP) infringement

insolvent debtor

people who are unable to pay debts as they become due

intellectual property right

results from a unique discovery

examples: patents, trademarks, copyrights

limited liability company (LLC)

A hybrid-type of business structure that provides the limited liability features of a corporation and the tax efficiencies and operational flexibility of a partnership

limited liability limited partnership (LLLP)

is a type of business structure that includes general partners and limited partners, but unlike a regular limited partnership, even the general partners have limited liability. That means their personal assets are protected from business debts and lawsuits.

limited liability partnership (LLP)

business structure that allows professionals the tax benefits of a partnership while avoiding personal liability for the malpractice of other partners

limited partnership

two or more partners without responsibility for management and without liability for losses beyond their investment with the right to share in the profits

liquidation

Sometimes referred to as Chapter 7 or straight bankruptcy, requiring the debtor to surrender all property to a court-appointed trustee

partnership

an association of two or more persons acting as co-owners of a business for profit

patent

Provides the owner with exclusive rights to hold, transfer, and license the production and sale of the product or process as an intellectual property right. Duration is 15-20 years

Patent and Trademark Office

examines and registers patent applications

S corporation

business structure that lets profits pass through to owners' personal income to avoid double taxation. It has rules like a 100-shareholder limit and U.S.-only ownership.

sole proprietorship

A business that is owned and operated by one person, with no legal distinction between the business and the owner. The owner is entitled to all profits and is responsible for all debts, losses, and liabilities

specification

the text of a patent that may include any accompanying illustrations

trademark

a distinctive name, mark, symbol, or motto identified with a company

trade secrets

business processes and information that is not IP but has value to competitors

unlimited liability

A disadvantage of sole proprietorships and partnerships, meaning the owner(s) are personally responsible for all business debts

advertising model

Advertisement is sold based on traffic on the website. Also known as "Selling of Time and Space" and applies to radio/TV, websites, print, etc.

affiliate model

Sellers rely on traffic from affiliated sites. Money is made by providing a selling service and taking a "cut" (commission)

freemium model

Basic services provided free while charging for premium. Free content or services are offered up to a certain point, with a charge for "premium content"

guerrilla marketing

low-cost, creative strategy that uses surprise or unconventional tactics to promote a product or brand and grab public attention.

loss leader pricing

Pricing the product below cost in an attempt to attract customers to other products

market

A group of consumers (potential customers) who have purchasing power and unsatisfied needs

marketing research

The gathering of information about a particular market, followed by analysis of that information

market segmentation

The process of identifying a specific set of characteristics that differentiate one group of consumers from the rest

mobile marketing

Use of portable wireless devices to connect to the Internet. People can access data and interact on the social web while on the move

penetration

Setting prices at such a low level that products are sold at a loss

primary data

New information that is gathered specifically for the research at hand. Surveys and experimentation are examples

qualitative research

explores ideas and experiences using non-numerical data like interviews or observations, considered subjective

quantitative research

uses numbers and statistics to measure and analyze patterns or trends.

secondary data

Information that has already been compiled. It is less expensive and available, but can be outdated, lack specificity, and have questionable validity

skimming

Deliberately setting a high price to maximize short-term profits, particularly for a unique product in the introductory stage of its life cycle

social media marketing

The use of social networks, online communities, blogs, wikis, and other online collaborative media tools for marketing purposes

subscription model

Users pay a fee to access a product. Customers pay one price for a package of goods or services

balance sheet

Reports a business's financial position at a specific time, Assets = Liabilities + Owners' Equity

break-even

when total revenues = total costs

capital budget

The plan for expenditures on assets with returns expected to last beyond one year

cash flow budget

A statement of estimated cash receipts and expenditures over a specified period of time

cash flow statement

Analysis of the cash availability and cash needs of the firm that shows the effects of a firm's operating, investing, and financing activities on its cash balance

expenses

Costs of producing goods or services

fixed assets

long-term, tangible items a business uses to operate—like buildings, equipment, or vehicles—that aren’t easily converted to cash

fixed costs

business expenses that stay the same no matter how much a company produces or sells

income statement

financial report that shows a company’s revenues, expenses, and profits or losses over a specific period

owners’ equity

The firm owners' residual interest in the business, part of the balance sheet equation

pro forma statements

Projections of a firm’s financial position over a future period.They depict projected changes on the operating and cash-flow budgets which are added to create projected balance sheet totals, using beginning balance sheet balances72 ...

sales forecast

The process of projecting future sales through historical sales figures and the application of statistical techniques. It is used in creating an operating budget84

operating budget

a statement of estimated income and expenses over a specific period of time

4 Ps

product, promotion, price, place

4 Cs

Cocreated, communities, customizable, choice

sources of capital

• commercial loans

• going public

• private placement

• venture capital

• informal risk capital (angel financing)

• Peer-to-peer

Accounts Receivable Financing

Short-term financing that involves either the pledge of receivables as collateral for a loan or the sale of receivables at a discounted value (factoring).

   Three Principal Parts of crowdfunding

• The entrepreneur who proposes the idea and/or venture to be funded

• The individual or groups who support the idea

• A moderating organization (the “platform”) that brings the parties together to launch the idea