Entrepreneur Dictionary for Startups

The entrepreneur dictionary for startups contains terms and definitions commonly used by entrepreneurs, investors, accelerators, and others who interact with startup ventures and startup financing.
For more entrepreneur resources check out our Acronyms for Startups, Infographics, or Startup FAQ.

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B2B - Business to Business.
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B2C - Business to Consumer.
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Balance Sheet - A condensed financial statement showing the nature and amount of a company’s assets, liabilities, and capital on a given date.³
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Bankruptcy - An inability to pay debts. Chapter 11 of the bankruptcy code deals with reorganization, which allows the debtor to remain in business and negotiate for a restructuring of debt.³
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BDC - Business Development Company

Bear Hug - An offer made directly to the Board of Directors of a target company. Usually made to increase the pressure on the target with the threat that a tender offer may follow.³
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Benchmarks - Benchmarks are performance goals against which a company's success is measured. Benchmarks are often used by investors to help determine whether a company should receive additional funding or whether management should receive extra stock.⁵
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Best Efforts - An offering in which the investment banker agrees to distribute as much of the offering as possible and return any unsold shares to the issuer.³
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BHAG - Big Hairy Audacious Goal.
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Big Hairy Audacious Goal -

The giant sweeping vision of a startup founder to change the world.⁷

Black Swan - An unpredictable event typically with extreme consequences.⁷
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Blind Pool - A blind pool is a form of limited partnership which doesn't specify what investment opportunities the general partner plans to pursue.⁹
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Blue Sky Laws - A common term that refers to laws passed by various states to protect the public against securities fraud. The term originated when a judge ruled that a stock had as much value as a patch of blue sky.³
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Board of Directors - A group of people elected by the company's shareholders (often to the terms of the negotiated Shareholders Agreement) that makes decisions on major company issues, including hiring/firing the Chief Executive Officer.⁷
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BOD - Board of Directors

Bond - Specific type of debt instrument most commonly sold by government entities.³
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Book Value - Book value of a stock is determined from a company’s balance sheet by adding all current and fixed assets and then deducting all debts, other liabilities, and the liquidation price of any preferred issues. The sum arrived at is divided by the number of common shares outstanding, and the result is book value per common share.³
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Bootstrapping - Funding a company only by reinvesting initial profits; from "pulling yourself up by your own bootstraps."⁷
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BR - Bounce Rate

Bridge Financing - A limited amount of equity or short-term debt financing typically raised within 6-18 months of an anticipated public offering or private placement meant to “bridge” a company to the next round of financing.³
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Bridge Loan - A temporary short-term loan that is obtained for use for an interim period, typically one year, until the borrower can obtain a more comprehensive, longer-term financing package.⁶
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Broker-Dealer - In reference to “Crowdfunding”, one of the two types of "Intermediary" (“Portals” being the other) authorized by the “JOBS Act” to handle the sale of crowdfunded securities (i.e. equity or debt instruments) by an “issuing company”. More generally, a governmentally regulated component of the U.S. financial system, either a natural person or an organization trading securities on its own account or on behalf of customers. Broker-dealers are regulated by the federal Securities and Exchange Commission (SEC), the Financial Industry Regulatory Authority (FINRA)(a “Self-Regulatory Organization”, or “SRO”), and sometimes the various states.¹
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Brokers - Licensed individuals or firms, which charge a fee, to raise capital for startup companies from private investors and funds.⁶
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BS - Balance Sheet

Burn Out - AKA. Cram Down - Extraordinary dilution, by reason of a round of financing, of a non-participating investor’s percentage ownership in the issuer.³
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Burn Rate - The rate at which a company expends net cash over a certain period, usually a month.³
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Business Development Company - (BDC) A vehicle established by Congress to allow smaller, retail investors to participate in and benefit from investing in small private businesses as well as the revitalization of larger private companies.³
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Business Judgment Rule - The legal principle that assumes the board of directors is acting in the best interests of the shareholders unless it can be clearly established that it is not. If the board was found to violate the business judgment rule, it would be in violation of its fiduciary duties to the shareholders.³
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Business Model Canvas - Based on nine building blocks, the Business Model Canvas is an entrepreneurial tool that enables entrepreneurs to design, develop, articulate, challenge, invent and pivot their strategic business model. The building blocks referenced above include customer segments, value proposition, channels, customer relations, revenue streams, key resources, key activities, key partnerships, and cost structures.⁶
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Business Plan - A document utilized by management and relied upon heavily by some investors, that entrepreneurs use in detailing their business concept as well as their company’s overall strategic and financial objectives. In recent years the Business Model Canvas has become increasingly popular with both entrepreneurs and managers as a guide or framework for the startup's efforts, and in many cases is now utilized in lieu of the Business Plan by these parties.⁶
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Business Plan Competition - A program historically run by a university or other not-for-profit organization to encourage students to develop plans for a new business. Increasingly a showcase competition for existing startups seeking financing from angels and other investors.⁷
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Business to Business -

Business to Business transactions occur when one business engages in commercial interactions with other business(es); under this scenario, one business is the supplier and the other business(es) engaging in the transaction are the customers.⁶

Business to Consumer -

Business to Consumer transactions occur when a business engages in commercial interactions directly with consumers; under this scenario, the consumer is the end-use customer of the product or services provided.⁶

Buyout - A buyout is defined as the purchase of a company or a controlling interest of a corporation's shares, product line or business. A leveraged buyout is accomplished with borrowed money or by issuing more stock.⁹
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