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        • 4 Easy Steps to Improve Startup Funding Efficiency

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        • 14 Types of Information Investors May Request as Part Of Their Due Diligence Checklist for Your Startup [Infographic]

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Chapter 7

April 28, 2015 by FundingSage -

The part of the Bankruptcy Code that provides for liquidation of a company’s assets.3


Related Terms

Liquidation Waterfall | Book Value | Chapter 11

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3 Mortal Sins Committed by Start-ups: Debt That Must be Avoided!

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Definitioner

HR
Human Relations
Liquidation
  • When a business is bankrupt or terminated, its assets are sold and the proceeds pay creditors. Anything left over is distributed to shareholders.2
  • 1) The process of converting securities into cash. 2) The sale of the assets of a company to one or more acquirers in order to pay off debts. In the event that a corporation is liquidated, the claims of secured and unsecured creditors and owners of bonds and preferred stock take precedence over the claims of those who own common stock.3
  • This is an event that represents the complete or partial closing of a company. In a liquidation event, a company’s assets and material goods (securities) are converted into cash and/or distributed for sale to pay off existing corporate debt.4
  • Liquidation is the sale of the assets of a portfolio company to one or more acquirers when venture capital investors receive some of the proceeds of the sale.5
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
Related Terms Venture Debt | Debt Table | Debt Financing Related Articles Why Startup Investors Hate Debt 3 Mortal Sins Committed by Startups: Debt That Must Be Avoided!
Assets
This word refers to all financial resources that a corporation owns. Current assets can be any form of currency, including traded inventory, investments, and checks. Fixed assets (capital assets) consist of material goods and equipment of a company, such as the land by which the company sits on, the company building, and technological machinery. Intangible assets mainly comprise of intellectual property protection, copyrights, patents, etc.4
Related Terms Net Asset Value | Net Worth | Servicemark Related Articles Patents and Trademarks 8 Board Resolutions for Entrepreneurs to Address as They Establish Their Startup