Entrepreneurial Finance and Accounting Strategies

These flashcards cover key vocabulary and concepts related to entrepreneurial finance and accounting strategies, focusing on definitions and explanations relevant for understanding key lecture points.

Entrepreneurial Finance

The study of funding requirements for new businesses and the sources of funds available.

iBackPack

A failed crowdfunding project aimed at creating a high-tech backpack with various electronic features.

Crowdfunding

A method of funding a project or venture by raising small amounts of money from many people, typically via the Internet.

Indiegogo

A crowdfunding platform that allows individuals to raise money for a variety of projects and initiatives.

Kickstarter

A crowdfunding platform focused on creative projects, offering 'all-or-nothing' funding.

Angel Investor

A wealthy individual who provides capital to startups, typically in exchange for convertible debt or ownership equity.

Venture Capitalist

An investor who provides capital to startups in exchange for equity, often involved in the management and decision-making process.

Seed Stage

The earliest phase in a company's lifecycle, focusing on initial funding based on a founder's idea for a product or service.

Debt Financing

The process of borrowing funds that must be repaid with interest.

Equity Financing

Investment in a company in exchange for a share of ownership and profits.

Balance Sheet

A financial statement that summarizes a company's assets, liabilities, and equity at a specific point in time.

Income Statement

A financial statement that shows a company's revenues and expenses during a specific period.

Statement of Cash Flows

A financial statement that outlines the sources and uses of cash in a company during a specific period.

Bootstrapping

A self-funding strategy to start and grow a business, relying on personal funds and creative solutions.

Charitable Organization

A nonprofit entity founded for altruistic purposes rather than profit generation.

Donation

A financial gift made without any expectation of receiving something in return, often used by nonprofits.

Grant

A financial gift provided for a specific purpose by a government or nonprofit organization, usually without needing to be repaid.

Bartering

The exchange of goods or services without the use of money.

Program Services

Basic offerings that a nonprofit provides to generate revenue.

Variable Costs

Costs that fluctuate based on the level of revenue generated by sales.

Fixed Costs

Costs that remain constant regardless of sales volume, such as rent.

Breakeven Point

The level of operations where total revenues equal total costs, resulting in neither profit nor loss.

Run Rate

An estimate of future revenue based on current performance, often annualized.

Burn Rate

The rate at which a startup uses up its cash reserves.

Commercial Viability

The capability of a business to operate successfully and sustainably.

Initial Public Offering (IPO)

The first time a company offers its shares to the public through a stock exchange.

Collaterals

Assets pledged by a borrower to secure a loan.

Net Income

The profit remaining after all expenses have been deducted from revenues.

SBA Loans

Loans backed by the Small Business Administration to help small businesses secure financing.

Tax-Exempt Status

A designation for organizations that are not subject to income tax, usually granted to nonprofits.

Financial Statements

Formal records of the financial activities of a business, providing a summary of its financial health.

Contribution Margin

The difference between sales revenue and variable costs, showing how much money is available to cover fixed costs.

Financial Viability

The ability of an organization to sustain itself financially over the long term.

Investing Activities

A section of the statement of cash flows that outlines cash spent on long-term assets.

Financing Activities

A section of the statement of cash flows showing cash inflows and outflows related to funding and financing operations.

Accounting Equation

The formula reflecting a company's financial position: Assets = Liabilities + Equity.

Accounts Payable

Money that a business owes to its suppliers for goods and services received.

Accounts Receivable

Money that customers owe to a business for products or services provided.

Equity

The owner's claim on the assets of a business after all liabilities have been settled.

Financial Projections

Estimates of a company's future financial performance, used as a tool for strategic planning and funding.

Revenue

Income generated from normal business operations, typically from the sale of goods and services.

Operating Activities

Main activities that generate revenue, including day-to-day transactions.

Investors

Individuals or entities that provide capital to a business with the expectation of a return.

Startup Financial Projection

Forecast of a new venture’s expected revenues, expenses, and cash flow.

Community Involvement

The participation in activities that benefit local communities, often seen in charitable organizations.

Social Entrepreneurship

The practice of pursuing innovative solutions to social problems through business strategies.

Management Decisions

The choices made by management regarding the operation and strategy of a business, informed by financial data.

Financial Requirements

The total amount of financing needed to launch and sustain a business.