Glossary of fundraising terms
Crowdfunding: a digital-age way of collecting funding through web-based platforms like Kickstarter and Prosper. Includes the following types:
Donation-based crowdfunding: Contributions without financial return
Reward-based crowdfunding: Backers receive non-monetary rewards
Equity crowdfunding: Investors fund in exchange for ownership
Debt crowdfunding: Individuals lend money for repayment with interest
Venture Fund: Specialized investment fund supporting startup and early-stage companies. Facilitates development and growth, providing financial resources and expertise.
Examples of venture funds:
Dreamspring New Mexico (formerly Accion)
Angel Investors: High net-worth individuals investing in early-stage startups, offering not only capital but also expertise and connections.
Mezzanine Debt Lenders: Blend of debt and equity financing, offering flexibility between traditional loans and equity investment.
Hard Money Lenders: Specialized lenders providing short-term loans with focus on collateral value.
Dry Powder: Capital available for new opportunities or supporting existing portfolio companies in venture capital and private equity.
Management Fee: Fee covering operational expenses charged by venture capital funds to limited partners.
Committed Capital: Total capital committed by limited partners to a venture capital fund over time.
Capital Call: Formal request by a venture capital fund for the contribution of committed capital from limited partners.