DICTIONARY

Accelerated Payments

It occurs when the borrower speeds up the payment of the loan. This can be done by shortening the amortization period, increasing frequency of payments and increasing amount of money at each regular intervals

Accelerator

In an accelerator, a Seed investment is made in return for equity and usually between $15K - $50K. Startups are admitted in classes and work in groups. They are generally given a deadline to complete intensive training and iteration (typically 1 week to 6 months). Startups end an accelerator program with a Demo Day in which they pitch to investors.

Accounting Standards for Private Enterprises (ASPE

The Accounting Standards for Private Enterprises (ASPE) are accounting principles for small and medium-sized enterprises (SMEs) in Canada that publish financial statements for general-purpose use but do not have to report their financial results publicly because their shares are not traded on a public stock exchange.

Accounts Payable

Accounts payable refers to the money a company owes its suppliers for goods and services that have been provided and for which the supplier has submitted an invoice. (This makes accounts payable different from accrued expenses, which do not have invoices to match.)

Accounts receiveable

finance/accounting term; often referred to simply as "receivables" or "A/R"; amounts of money that a business is currently owed by customers but has yet to receive. Simply, A/R is how much money your customers currently owe you in the ordinary course of business

Accured Expenses

Accrued expenses are those incurred for which there is no invoice or other documentation. They are classified as current liabilities, meaning they have to be paid within a current 12-month period and appear on a company's balance sheet.

Accured Payments

Accrued expenses are those incurred for which there is no invoice or other documentation. They are classified as current liabilities, meaning they have to be paid within a current 12-month period and appear on a company's balance sheet

Acid-Test Ratio

The acid-test ratio compares a company's "quick assets" (cash and accounts receivable) to its current liabilities. It is one of six basic calculations used to determine short-term liquidity - the ability of a company to pay its bills as they come due. The acid-test ratio is considered the most stringent calculation of short-term liquidity. The formula for calculating it is: Quick assets (cash + accounts receivable) / current liabilities This determines how many dollars a business has available to pay each dollar of bills it owes. Ideally, a business should have an acid-test ratio of at least 1:1. A company with less than a 1:1 acid-test ratio will want to create more quick assets. It can do this by offering discounts to increase sales, collecting on accounts receivable (possibly offering special terms for early payment) or asking shareholders to invest more cash in the company.

Acqui-hire

One company's acquisition of another for the primary purpose of hiring its employees, rather than for the intrinsic value of the business itself.

Acquisition

Business acquisition is the process of acquiring a company to build on strengths or weaknesses of the acquiring company. A merger is similar to an acquisition but refers more strictly to combining all of the interests of both companies into a stronger single company. The end result is to grow the business in a quicker and more profitable manner than normal organic growth would allow

Add-on-service

Add-on Services are the services provided by a venture capitalist that are not monetary in nature, such as helping to assemble a management team and helping to prepare the company for an IPO.

Advertizing

The activity of attracting public attention to a product or business, as by paid announcements in the print, broadcast, or electronic media. Not to be confused with marketing or public relations. See AMIC.com for an extensive glossary of advertising terms

Advisory Board

An advisory board is a group of people chosen to give expert and unbiased advice to a business. Members are not typically compensated. Advisory boards operate informally. They provide insight and guidance tailored to the specific needs of a business and serve as a sounding board for company leaders, helping validate their strategies and ideas. One of the main benefits of an advisory board is that it provides perspective and observations about strategic gaps and opportunities, with no self-interest on the part of the members.

Alpha Test

Internal testing, of a pre-production model, typically on a controlled basis, with the objective of identifying functional deficiencies and design flaws.

Amortization Expense

Amortization expenses account for the cost of long-term assets (like computers and vehicles) over the lifetime of their use. Also called depreciation expenses, they appear on a company's income statement. When an amortization expense is charged to the income statement, the value of the long-term asset recorded on thebalance sheet is reduced by the same amount. This continues until the cost of the asset is fully expensed or the asset is sold or replaced. Canada Revenue Agency sets annual limits on how much of a long-term asset's cost can be amortized in a given year. These limits are called capital cost allowances.

Amortization Period

The amortization period is the total length of time it takes a company to pay off a loan - usually months or years. If a company chooses a short amortization period, it will pay less interest overall but must make higher payments on the principal (the original amount of the loan before interest). A company that takes a longer amortization period will have lower monthly payments but pay more interest overall. The term "amortization period" should not be confused with amortization expenses. While both refer to financial changes over time, amortization expenses are the costs of long-term assets like computers and vehicles that a company accounts for over their lifetimes.

Angel Investor

Angel investors invest in small startups or entrepreneurs. Often, angel investors are among an entrepreneur's family and friends. The capital angel investors provide may be a one-time investment to help the business propel or an ongoing injection of money to support and carry the company through its difficult early stages.

Angel Investor

An angel investor is a wealthy person who invests his or her own money in a company - usually a start-up - that is in the early stages of development. Angel investors expect to take ownership positions in the companies they support because their capital is unsecured - they have no claim on the company's assets. Their ownership may take the form of equity or convertible debt. They also tend to have clear exit strategies for ending involvement with the business. The goal of an angel investor is to help businesses get established. Their funding terms are often more favourable than those of other lenders. Many invest to support the entrepreneur behind the business, not just the business itself. Angel investors may provide a one-time injection of money into a business or invest on an ongoing basis in the company's fixed assets or working capital.

Appraisal

A formal estimate of the value of something on the open market. It also describes how the estimation and conclusion of value was made.

Assests

The term "assets" refers to everything a company owns. They are the economic resources it uses to increase sales, reduce costs or otherwise generate value for the owners. For example, buying computers and software for office workers can speed up daily tasks, increasing productivity. Two broad categories of assets appear on a company's balance sheet: Current assets used to generate value within the fiscal year Long-term assets (also known as fixed or capital assets) used to generate value beyond the next 12 months Reviewing a company's assets tells analysts and investors what management believes will generate the most value.

Authorized shares

the total number of shares of stock that a company is legally allowed to issue under its articles of incorporation