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ch19 stack
| Term | Definition |
|---|---|
| bootstrapping | operating as cheap as possible |
| factor | agent who handles an entrepreneur's account receivable for a fee |
| equity capital | cash raised for a business in exchange for ownership in the business |
| equity | ownership in a business |
| risk capital | money invested in companies where there is financial risk |
| Angel | private investor who funds startup companies |
| venture capital | source of equity financing for small business with exceptional growth potential and good management |
| venture capitalists | individual investors who invest venture capital professionally |
| debt capital | is the money raised by taking out loans |
| operating capital | money a business uses to support its operations short term |
| line of credit | an arrangement whereby a lender agrees to lend a specific amount of money for a specific amount of interest over a specific period of time |
| trade credit | credit one business grants to another business for purchase of goods |
| pro forma | estimated costs of the business |
| character | borrowers reputation for fair and ethical business practices |
| capacity | ability business to pay back a loan |
| capital | net worth of a business |
| collateral | security in the form of assets that a company pledges to a lender |
| conditions | circumstances at the time of the loan request |
| due diligence | analysis private investor makes before investing |
| private placement | private offering or sale of securities directly to a limited number of investors |
| IPO | sale of stock in a company on a public stock exchange |
| stock | type of security signifies ownership |
| working capital | operating costs |
| contingency funds | extra amount of money that is saved till absolutely necessary |