By Our Special Reports Team

Bridge Financing

This may be required by a company in the transition from being privately owned to going public.

Business Angels

Individual investors who tend to invest private funds, usually between £10,000 (E15,960) and £100,000 in start-ups.

Other Early-stage

After the product development stage companies may require further funds to start commercial manufacturing and sales, as they will not yet be generating profit.

Expansion

When a company is breaking even or trading profitably funds can be needed for its further growth and expansion.

Incubator

An incubator takes budding entrepreneurs into its fold, becoming involved in every stage of its development. For this they receive a similar equity stake to VCs, but at a lesser price as they invest earlier. Most incubators will manage the start-up in-house, providing office space, equipment, advice, personnel, and funds. This hands-on approach aims to produce successful companies that can leave the incubator as a freestanding economic entity. If a start-up fails to secure second-round funding after a period of time - anything from 6 months to a year - the incubator will leave it to battle on alone. Business-incubator.com is an enterprise backed by Sun Microsystems, Cisco Systems, Oracle and Exodus. GorillaPark, set up in Netherlands by Jerome Mol, founder of Tornado-Insider.com, models itself as a business accelerator providing technical expertise as well as an experienced management team. London-based Brainspark is focused on helping entrepreneurs manage the growth of idea to product.

IPO - Initial public offering
IPO is the first time a company sells stock to the public - "going public". Stocks become tradable when all the shares of an IPO have been sold.

Internal Rate of Return
The rate of return that would make the present value of future cash flows plus the final market value of an investment or business opportunity equal the current market price of the investment or opportunity.

Matchmaker

atchmakers create a market and meeting place for entrepreneurs and investors. They screen entrepreneurs to assess the validity of their idea and its potential. Introductions are made between concept and money, on-line or face-to-face. FirstTuesday.com is one such forum Europe. It co-ordinates meetings between investors and entrepreneurs on the first Tuesday of every month. In the US Garage.com puts entrepreneurs through their paces on a two-day "from seed to IPO" boot camp before it introduces them to its network of VCs.

Management Buy-in (MBI)

An outside manager or group may buy into a company with the support of private equity investors.

Management Buy-out (MBO)

An existing product line or business may be acquired through funds enabling a buy-out by operating management and investors.

Replacement Capital(Secondary Financing/Purchase)

Purchase of existing shares from another private equity investment organisation or from another shareholder(s).

Refinancing Bank Debt
This can reduce gearing by replacing bank debt with equity finance.

Seed

Initial finance to research, develop and assess an original concept before an enterprise reaches the start-up phase. Normally provided by founders, incubators or angels.

Start-up

oney provided for product development and initial marketing. It is intended to help companies which are in the process of setting up or in business, but have not sold their product commercially.

Venture Catalyst

Venture catalysts accelerate the process of fusing entrepreneurs and VCs by "screening" start-ups for financiers. E-chron, a Scandinavian VC, works as a launch pad, helping internet entrepreneurs find the best funding - be it from venture capital, business angels or incubators. It runs e-challenge, an entrepreneurs' dream competition to bring Europe's brightest people and ideas into the VC spotlight.

Venture Capitalist

Venture Capitalists invest in unquoted companies and can provide some management expertise to start-ups. In return they take an equity stake of 25 to 30 per cent with a view to making returns on the IPO. US based VC, Kleiner Perkins Caufield & Byers, a US-based VC, is ranked as one of America's top 10 financiers. It has successfully backed through to IPO Netscape, Amazon, and Excite.