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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IB - Investment Bank

ICR - Interest Coverage Ratio

Illiquid - An investment that cannot be readily sold or transferred into cash. Unlike public stocks for which there is a ready market, angel investments are typically held for 5 to 10 years.⁷

IM - Instant Messaging

Impact Investing - Financial investments that also aim to have a benefit for society.⁷

In-Licensing Agreement - Agreements with external or third parties under which the startup has been granted permission to utilize certain technologies owned by those third parties, under defined terms and conditions.⁶

Income Statement - A financial statement that shows a company’s financial performance over a specific time period. It delineates the Revenue and Expenses. It also delineates Net Income, which is Total Revenue – Total Expenses. Because this statement includes both cash and non-cash items, it does not reflect net cash flow.⁶
- Synonyms: P&L

Incubator - An organization established to support the development of startup companies with intermediate term access, (1 - 3 years) to facilities, (office and lab space), resources and development programs, potentially including mentoring. Incubators differ from accelerators in that the latter typically focus on acceleration of growth in a shorter defined period whereas the former is focused on the development of the company and its product over a longer time period.⁶

Information Rights - A provision, typically found in Investors Rights Agreements which requires startup companies to provide board updates and financial information to minority shareholders on a periodic, (such as quarterly or yearly) basis.⁶

Initial Public Offering -

(IPO) The sale or distribution of a stock of a portfolio company to the public for the first time. IPOs are often an opportunity for the existing investors (often venture capitalists) to receive significant returns on their original investment. During periods of market downturns or corrections, the opposite is true.³
(IPO)This is a private corporation’s first-time sale or allocation of a stock that is made available to the public. IPOs can be distributed to both young and established companies who seek to expand or warrant public trading.⁴

- Synonyms: IPO

Initial Public Offering -

Initial Public Offering or IPO is the first sale of stock by a private company to the public. IPOs are often smaller, younger companies seeking capital to expand their business.⁵

Institutional Investors -

Organizations that professionally invest, including insurance companies, depository institutions, pension funds, investment companies, mutual funds, and endowment funds.³
Institutional Investors refers mainly to insurance companies, pension funds and investment companies collecting savings and supplying funds to markets but also to other types of institutional wealth like endowment funds, foundations, etc.⁵

Intermediary - Either a "Broker-Dealer" or a "Portal", both allowed by the JOBS Act to consummate a securities-based crowdfunding transaction.¹

Internal Rate of Return -

A typical measure of how VC Funds measure performance. IRR is technically a discount rate: the rate at which the present value of a series of investments is equal to the present value of the returns on those investments.³

Often used in capital budgeting, it's the interest rate that makes net present value of all cash flow equal zero. Essentially, IRR is the return that a company would earn if they expanded or invested in themselves, rather than investing that money abroad.⁵

Invention Assignment Agreement - An agreement under which founders, employees, contractors, developers and others assign intellectual property rights to a company. Typically, these stakeholders or related parties of the company acknowledge that any and all intellectual property developed by them while working for or with the company, whether individually or jointly with other stakeholders, are the property of the company, not the individual. It can also apply to intellectual property that founders and others may contribute to a startup company at the time of its establishment.⁶

Investment Banks - Investment Bank is a financial intermediary that performs a variety of services which includes underwriting, acting as an intermediary between an issuer of securities and the investing public, facilitating mergers and other corporate reorganizations, and also acting as a broker for institutional clients.⁵

Investment Company Act of 1940 - Investment Company Act shall mean the Investment Company Act of 1940, as amended, including the rules and regulations promulgated thereunder.³

Investment Letter - A letter signed by an investor purchasing unregistered long securities under Regulation D, in which the investor attests to the long-term investment nature of the purchase. These securities must be held for a minimum of one year before they can be sold.³

Investment Round - A set of one or more investments made in a particular company by one or more investors on essentially similar terms at essentially the same time.⁷

IP - Internet Protocol

IP - Intellectual Property

IP Address - Internet Protocol Address

IPO - Initial Public Offering.

IRA - Individual Retirement Account

IRA Rollover - The reinvestment of assets received as a lump-sum distribution from a qualified tax-deferred retirement plan. Reinvestment may be the entire lump sum or a portion thereof. If reinvestment is done within 60 days, there are no tax consequences.³

IRR - Internal Rate of Return.

ISP - Internet Service Provider

Issued Shares - The amount of common shares that a corporation has sold (issued).³

Issuer -

A company raising funds through a "Portal" or "Broker-Dealer" via securities-based crowdfunding, and issuing a security (equity or debt) to each investor in return for his or her funds.¹
Refers to the organization issuing or proposing to issue a security.³

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