Entrepreneurship Key Terms

7(a) Loan Program - Provides loans to small businesses unable to secure financing through normal lending channels. The program operates through private lenders who provide loans
guaranteed by the SBA.

8(a) Loan Program - Assists in obtaining federal agency contracts through a certification process carried out by the SBA. The federal agencies, with
SBA guidance, then negotiate subcontracts with certified 8(a) program participants.

Angel Investor - An individual who provides capital to a startup. Unlike a partner, the angel investor is rarely involved in management. 

B2B – Business to Business; a strategy in which one company sells products or services directly to another company rather than to consumers

B2C- Business to Consumer; when a retailer sells a product to a customer, such as in a grocery store or hardware store.

Bankruptcy - Legal relief from the payment of all debts after the surrender of all assets to a court-appointed trustee. Assets are distributed to creditors as full satisfaction of debts, with certain priorities and exemptions. A person, firm or corporation may declare bankruptcy under one of several chapters of the US Bankruptcy Code: Chapter 7 covers liquidation of the debtor's assets; Chapter 11 covers reorganization of bankrupt businesses; Chapter 13 covers payments of debts by individuals through a bankruptcy plan. A person or business may voluntarily assign himself into bankruptcy or may be petitioned into bankruptcy by his creditors. 

Debt Financing - The use of borrowed money to finance a business, must be paid back with interest.

E-commerce - Electric commerce; the conducting of business communication and transactions over networks and through computers. Specifically, ecommerce is the buying and selling of goods and services, and the transfer of funds, through digital communications.

Entrepreneur - An individual engaged in the process of starting and growing one's own business or idea. 

Entrepreneurship Education – Programs, schools and other ways to inform potential entrepreneurs about the tools necessary for a successful small business

E-tailing – Electronic retailing; "virtual" storefronts that act as a catalogue of products of merchants and usually include a "shopping cart" system to enable consumers to purchase items online.

Equity Financing - When stock (common or preferred) is sold and, in return for the money paid, the individuals or institutions receive ownership interest in the corporation.

Gazelles - Firms with revenue of at least $100,000 (initial year) that sustained at least 20 percent growth in revenue over four consecutive years; contribute approximately 1 out of every 7 gross new jobs added to the economy each year.

Innovation - Introduction of a new idea into the marketplace in the form of a new product or service, or an improvement in organization or process.

Intellectual Property - The group of legal rights to things people create or invent. Intellectual property rights typically include patent, copyright, trademark and trade secret rights.

Microenterprise/Microfinance - The supply of loans, savings, and other basic financial services to those in need to establish or expand a small, self-sustaining business

Microloan Program - Developed by the SBA to increase the availability of very small loans to small-business borrowers. These funds may be used for working capital, inventory, supplies, furniture, fixtures, machinery and equipment and are available from private, nonprofit intermediaries

Outsourcing/Off-Shoring - Outsourcing overseas or in a separate country, The practice of turning-over responsibility of some to all of an organization's information systems applications and operations to an outside firm. An arrangement where one company provides services to another company that would otherwise have been implemented in-house.

Regulatory Flexibility Act – Agencies proposing rules that would have a "significant" economic impact on small business, small not-for-profit organizations, or small governmental entities must prepare a Regulatory Flexibility Analysis (RFA) and try to find simpler, less burdensome ways for such small organizations to comply with federal requirements.

SBA – Small Business Administration; A federal government agency that makes, guarantees and purchases loans to small wholesale, retail, service and manufacturing businesses.

SBDC – Small Business Development Centers; provides management assistance to current and potential small business owners. 

SBIC - Small business investment companies; lending and investment firms that are licensed and regulated by the Small Business Administration. The licensing enables them to borrow from the federal government to supplement the private funds of their investors.

Seed Funding - The money used to purchase equity-based interest in a new or existing company. This funding is usually quite small since the venture is still in the idea or conceptual stage.

Social Entrepreneurship - The job of a social entrepreneur is to recognize when a part of society is stuck and to provide new ways to get it unstuck. He or she finds what is not working and solves the problem by changing the system, spreading the solution and persuading entire societies to take new leaps. Social entrepreneurs are not content just to give a fish or teach how to fish. They will not rest until they have revolutionized the fishing industry.

Startup - A new business venture in its earliest stage of development.

Technology Transfer - The process for moving discoveries and inventions from university labs into the private sector; enhanced by the Bayh-Dohl act of 1980 that allowed for the transfer of exclusive control over government funded inventions to universities and businesses operating with federal contracts for the purpose of further development and commercialization. 

Venture Capital – The money and resources made available and invested in the in startup firms and small businesses -- called also risk capital

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