Vc F-G

Front 1

Factor

Back 1

A systematic risk in the economy. In the CAPM, the only factor is the market premium.

Front 2

Factor model

Back 2

A model where expected returns are determined by factor loadings on a set of factors. The CAPM is an example of a factor model, where the market premium is the factor and beta is the factor loading.

Front 3

Fama-French Model (FFM)

Back 3

A multifactor model with three factors related to the market premium, the size of the economy, and the growth prospects of the economy.

Front 4

FDA

Back 4

Acronym for the Food and Drug Administration, a unit of the U.S. government that is responsible for the regulation of prescription drugs.

Front 5

FDA approval

Back 5

The final step before a drug can be legally sold in the United States.

Front 6

FFM

Back 6

Acronym for the Fama-French Model.

Front 7

Financial intermediary

Back 7

Any economic actor that stands between a supplier of capital and the real investment of that capital.

Front 8

Financial options

Back 8

Options on financial assets. In contrast, real options are options on, you guessed it, real assets.

Front 9

Financing round

Back 9

(=Round) A discrete event where a young company receives capital from investors. Financing rounds are often referred to sequentially as first round (=Series A), second round (=Series B), etc.

Front 10

Finite games

Back 10

A game with a finite number of moves for every player. Finite games can be completely described using the normal form and the extensive form.

Front 11

Firm

Back 11

In VC, a firm is a legal entity that serves as the general partner for a VC fund.

Front 12

First Round (Series A)

Back 12

The first round of investment by VCs.

Front 13

FOF

Back 13

Acronym for fund-of-funds.

Front 14

Folk theorem

Back 14

Loosely speaking, the folk theorem is that virtually any observed behavior in an infinite game can be supported as part of a subgame-perfect Nash equilibrium.

Front 15

Follow-on investments

Back 15

Investments made in round Y by a VC investor in Round X, where Y > X.

Front 16

Full-rachet antidilution

Back 16

A strong version of antidilution protection, where the adjusted conversion price is the lowest price paid by any later-round investor.

Front 17

Fully diluted basis

Back 17

Any computation that assumes the conversion of all preferred stock and the exercise of all options.

Front 18

Fully diluted share count

Back 18

The total number of shares outstanding assuming the converesion of all preferred stock and the exercise of all options.

Front 19

Fund

Back 19

(=VC fund) A pool of capital used for VC investments. Typically, a VC fund is a limited partnership with a fixed lifetime, where the capital is provided by limited partners and the fund is managed by a VC firm acting as the general partner.

Front 20

Fund-of-funds (FOF)

Back 20

A fund that makes investments in other funds, rather than making investments directly in portfolio companies.

Front 21

Game tree

Back 21

(=Extensive form)

Front 22

Gatekeeper

Back 22

A consultant who advises limited partneres on their fund investments.

Front 23

General partner (GP)

Back 23

The investment manager of a limited-partnership VC fund.

Front 24

Geometric mean

Back 24

For a series of N numbers, the geometric mean is the nth root of the product of all N numbers.

Front 25

Global beta

Back 25

The beta in a global CAPM.

Front 26

Global CAPM

Back 26

The CAPM, with the global market premium used as the factor.

Front 27

Global market premium

Back 27

The expected excess return of the value-weighted global equity market.

Front 28

GP

Back 28

Acronym for general partner.

Front 29

GP valuation

Back 29

The valuation, using option pricing methods, of the GP's stake in an investment.

Front 30

GP%

Back 30

The expected percentage of partial valuation that belongs to the VC. GP valuation = GP% * partial valuation.

Front 31

Graduation

Back 31

In the reality-check DCF model, graduation marks the date where a company moves from the rapid-growth period to the stable-growth period.

Front 32

Graduation value

Back 32

The discounted value fo the company at graduation.

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Gross investment

Back 33

The gross amount added to a company's capital stock in a period.

Front 34

Gross investment multiple

Back 34

(=Gross value multiple, =GVM) The total value of all investments at exit, divided by investment capital.

Front 35

Gross return

Back 35

A return calculated before subtracting management fees, carried interest, or any other investment costs.

Front 36

Gross value multiple

Back 36

(=Gross investment multiple)

Front 37

Growth capital

Back 37

Capital used for VC investing beyond the early stage.

Front 38

Growth factor

Back 38

In a binomial tree, the growth factor is the riskfree rate measured over the step size of the tree.

Front 39

GVM

Back 39

Acronym for gross value multiple (=Gross investment multiple)