SBJ/20090126/SBJ In-Depth

Venture capital glossary: Some key terms to know

Angel investor — Individual or organization providing funds to a startup or early-stage company. Angel investors are often not involved in day-to-day management, but can be critical resources in terms of expertise and industry contacts.

Deal flow — The number of potential investments reviewed by a venture capital operator within a given period.

Exit strategy — Process by which venture capital firms intend to recoup their original investment. Also known as a liquidity event.

Seed capital — Money used to help form a new company. The provider of seed capital, usually some form of angel investor, gets equity in the new company. Funding amounts for seed capital are often small given the relative infancy of the company.

Series A round — An initial private, preferred stock offering of a company previously funded by its founders and/or angel investors. Later rounds are termed Series B, Series C and so forth.

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