Issuer: A business that is selling corporate securities to an outside investor.Due Diligence: The forensic process investors undertake when both evaluating an opportunity and validating representations made by the issuer.Term Sheet: A non-binding summary of the terms either proposed by the issuer, or offered by an investor.Closing: The completion of a financial transaction typically involving the execution of an investor qualification questionnaire, stock purchase agreement, and issuance of stock certificates to investors.Debt: Monies borrowed in exchange for a promise to pay back (i.e. a promissory note). Generally secured with business and personal assets.Equity: The culmination of shareholder value contained in the business. Generally the businesses assets less its liabilities. Also referred to as “Net Asset Value” or “Book Value”.Corporate Securities: Ownership in a business sold to an investor in the form of common or preferred stock. Generally unsecured.Shareholders: Founders, Investors, and/or Managers who own common or preferred stock in a Corporation.Stakeholders: Creditors, Customers, and other parties (e.g. community) with a direct or indirect interest in a business.Assets: Items the firms owns or substantially controls whether fixed, current, tangible, or intangible. (e.g. Property, Plant, Equipment, Furniture, Fixtures, Cash, Securities, Receivables)Liabilities: Obligations to pay creditors, or other liens or encumbrances that effectively reduce the value of the businesses assets. (e.g. Payables, Debt, Judgments)EBIDTA: Earnings before Interest, Depreciation, Taxes, and Amortization. Effectively the actual net operating profit (base cashflow) of the company before certain tax related accounting expenses are applied. Also known as Operating Income, Income from Operations, Net Operating Income (NOI).Cashflow: Monies available, after normal expenses, to the company for financing and investing activities. Generally used to determine a business’s ability to grow, take on debt payments, and/or pay dividends.Debt Service: Payments of principle and interest towards accrued debt. Corporation: The generally accepted legal instrument (entity) used to provide tangible ownership in and management of a business that involves outside investors.Institution: A legally organized group such as a fund, investment bank, or commercial bank that makes direct investments on behalf of its shareholders. As opposed to an individual, or small informal group of angels.Return on Investment (ROI): The expected amount of payback to an investor over a given period of time. Typically calculated less the original investment (e.g. $4m return on $1m would equal a 3x ROI).Exit Strategy: An event that will enable the founders and/or investors to recoup their investment such as a public offering, acquisition, or follow-on financing.
Scg Non Traditional Sources Of Capital
Non-Traditional Sources of Capital<br />Presented By: Alan D. Lewis II<br />STONECUTTER GROUP, llc<br />Building the Foundation for Responsible and Sustainable Enterprise<br />