The Handbook of Financing Growth: Strategies, Capital Structure, and M&A Transactions, Second Edition

Glossary

Herein is a glossary of terms used in corporate finance and business. We have attempted to provide a comprehensive listing of terms generally used, as well as those we have referenced in previous sections.

 

A round A financing event whereby venture capitalists become involved in a fast-growth company that was previously financed by founders and/or angels.

accelerated depreciation A depreciation method that yields higher depreciation in the early years and less in the later years.¹

accounts payable See payables.

accounts receivable See receivables.

accredited investor A person or legal entity, such as a company or trust fund, that meets certain net worth and income qualifications and is considered to be sufficiently sophisticated to make investment decisions in complex situations. Regulation D of the Securities Act of 1933 exempts accredited investors from protection under the Securities Act. Typical qualifications for a person are $1 million net worth and the two most recent years of annual income equal to or exceeding $200,000 individually or $300,000 with a spouse, and the expectation of the same level of income for the current year; $5 million in assets for an entity.

advisory board See board of advisers.

alternative asset class A class of investments that includes private equity, real estate, and oil and gas, but excludes publicly traded securities. Pension plans, college endowments, and other relatively large institutional investors typically allocate a certain percentage ...