BUSINESS

Question 1

IPO (initial public offering)

Answer 1

When a private company goes public by offering shares of their company to the public (outside investors).

Question 2

Benefits for IPO

Answer 2

It can raise capital / scale the business due to outside investors investing in stock/shares.

Question 3

SEC (securities exchange commission)

Answer 3

Government branch that oversees / reviews if a public company is ready to go public.

Question 4

Shareholder

Answer 4

Is a person or company that holds shares within a companies stock.

They get to vote on issues that effect the company.

Question 5

Unicorn

Answer 5

Startup that’s valued at 1billion

Question 6

Shares

Answer 6

Unit of Equity of ownership in a company.

Question 7

Common Stock

Answer 7

People that hold some time of ownership within the company.

Question 8

Underwriter

Answer 8

Works with the company to Evaluate and determine the set price of the IPO stock

Question 9

TAM (total available market)

Answer 9

Total demand for your product globally. With only one provider.

Question 10

SAM (serviceable available market)

Answer 10

The portion of the market that’s attainable for your business.

SAM can be due to specialization in your business or geographical location.

Question 11

SOM (serviceable obtainable market)

Answer 11

How many customers would realistically buy your product.

Question 12

Term Sheet

Answer 12

Agreement between company & investor before a deal is finalized (during seed round).

Question 13

Angel Round / Angel Investor

Answer 13

Company is launching, funds for day to day operations, hire team.

Investors invest for small equity.

Family & Friends

Question 14

Series A

Answer 14

Startup faze. Shares for funding.

Finanical risk - investor

Question 15

Series B

Answer 15

Sign of growth:
customer base, performance, proven product & services.

Revenue predictions / forecast.

Question 16

Series C

Answer 16

Company is preparing for rapid growth. Proven track record, sales, scaled up and developed new products and services.

Wants to make acquisitions to competing companies.

Question 17

Bridge

Answer 17

Pre- merger / acquisition of a company or pre IPO.

Question 18

LTV(lifetime value)

Answer 18

Be able to track the average revenue you make off a customer during the entire time they are customer.

Average revenue a customer will generate during the lifespan of them being a customer.

Key to metric when you have a subscription base model.

Example:
Monthly cost of subscription divide by the number you lose a customer.

$10 x 5 (months) = $500 (average price a customer stays with me)

Key, have a retention strategy.

Build add on subscription model

Question 19

CAC(customer acquisition cost)

Answer 19

The cost it takes to acquire a new customer.

Example:
Sales & Marketing Expense / Number of New Customers

$100 / 5 = $50 (to gain a new customer).

Question 20

Private Equity Fund

Answer 20

Investing in business that are private / not trading

Question 21

Venture Capital Fund (VC)

Answer 21

Investing in startups with the potential for long term growth.

Question 22

Preferred Stock

Answer 22

Ownership in a company stock over Common Stock, higher dividends & assets.