"B" Round
A financing event whereby professional investors such as venture capitalists are sufficiently interested in a company to provide additional funds after the "A" round of financing.
Subsequent rounds are called "C", "D", and so on.
See also "A round".
Backdoor listing
A technique used by a private company to become a public company without going through the customary initial public offering (IPO) process.The transaction consists in merging the company into a shell company the stock of which is freely tradeable.
A quantitative sumary of a company's financial condition at a specific point in time, usually the end of the financial year, including assets, liabilities and net worth.
A venture capital fund that invests in both early stage and expansion with no particular concentration on either.
Ballon Note
A promissory note requiring repayment of little or no principal until the final payment.
See Balloon Payment.
The final payment under a promissory note commonly representing a large portion or all of the principal.
Barriers to Entry
Circumstances particular to a given industry that create disadvantages for new competitors attempting to enter the market.
These may include government regulations, economic factors, and marketing conditions.
An investor's total investment, including purchase price, commissions and other expenses, used to determine capital gains and capital losses for tax purposes.
Also used to express the difference between the cash price and the future price of a given commodity.
1/100 of 1% (0,01%).
Used to measure changes in or differences between yields or interest rates.
Basis Value
Financial asset (security, currency, index, etc.) serving as reference for an option or future.
Bearer Ssecurity
Listed or non listed securities that are not registered in any name.
Investment banks competing with other institutions for the lead of or the participation in a financial transaction, such as an IPO, a bond issue, etc.
They present their track record and their particular advantages.
Index, blue chips or groups of securities ( i.e. State loans ) which serve as reference for the calculation of the performance of other investments.
Best Efforts Underwritting
An issue in which the underwriter does not purchase nor commits to purchase itself any unsold securities.
The underwriter agrees only to use its best efforts to sell the securities as the issuer's agent.
See All-or-none and Firm Commitment Underwriting.
Best Execution Requirement
The obligation of brokers, dealers, market makers and others to execute customer orders at the best price currently available.
See "Beta factor"
Beta Factor
In the capital asset pricing model, beta is the second parameter of a linear regression between the reviewed asset's return and the market return.
The linear regression is of the form:
R (asset under review) = alpha + beta * R (market).
[Buy-in Management Buy-out]
A combination of a management buy-in (MBI) and a management buy-out (MBO).
In a BIMBO, an entrepreneur or group of external managers financed by venture capitalists buys into a company and teams up with members of the target management team to run it as an independent business.
Black Scholes Formula
A method to calculate the theoretical value of stock options based upon the exercice price, the fair market value of the underlying security (Basis value), the length of the exercice period of the option and the volatility of the underlying security.
Blank Cheque Preferred Stock
Authorised preferred stock, the date of issue and the terms of which are deliberately left open, allowing the board of directors to fix the terms without referring to stockholders.
May be used as a protection against unfriendly take-overs (Anti-Take-over Provisions).
Stock of a large company with a solid record of stable earnings and dividend growth and a reputation for high quality management and/or products.
Blue Sky Law (USA)
State laws regulating the offer and sale of securities and the registration of broker/dealers.
All securities issued by a company must be offered and sold in compliance with or under an exemption from blue sky laws and regulations of each state in which they are issued.
Minutes of the meetings of the board of directors.
Bond (USA)
A debt obligation, often secured by a mortgage on some property or asset of the issuer.
Book ou Syndacate Book
The list of investors who have indicated an interest in purchasing securities in a public offering.
It is kept by the lead managing underwriter (Lead manager) during the road show.
See also Hard Circle.
A company's net worth (assets minus liabilities) divided by the number of shares outstanding.
Process pursuant to which the lead managing underwriter (Lead manager) in a public offering solicits institutional and retail investors to commit to subscribe prior to the closing of the offering.
Bookrunner
The underwriter in charge of the bookbuilding process.
Term used to describe the start-up of a company with very little capital.
A point reached when a company's revenue equals its expenses.
Bridge Loan, Bridge Finance ou Bridge Round
A temporary investment to provide financing for a relatively short time period until the issuer can complete a longer term financing such as a public offering.
Bring-along Rights
Contractual rights pursuant to which minority shareholders are required to sell their securities in connection with the sale by the majority shareholders of all of their shares or a major part of the assets of their company.
Such rights typically apply in connection with an acquisition transaction.
Bring-down Letter
A letter usually prepared by lawyers confirming, as of the date of the closing ( immediately before the pay-out of the proceeds to the issuer ), the representations, warranties or covenants made at an earlier date in a legal document.
Broker / Dealer
An individual or firm engaged in the business of buying and selling securities for his own account or on behalf of third parties.
In the USA, registration with the SEC and the States in which they operate is compulsory
Burn Rate
The amount a start-up company needs in order to finance overhead before generating a positive cash flow from operations.
Refers also to the speed at which the financial means are used.
A document that describes the entrepreneur's idea, the market problem, proposed solution, business and revenue models, marketing strategy, technology, company profile, competitive landscape, as well as financial data estimations for the coming years.
The business plan opens with a brief executive summary, probably the most important element of the document due to the time constraints of venture capital funds and angels.
A corporation's repurchase of stock or bonds it has issued.
Also, the purchase of a long position to offset a short position.