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Glossary Accredited Investor: For an individual to be considered an accredited investor, he or she must have a net worth of at least one million US dollars excluding the value of their primary residence or have made at least $200,000 each year for the last two years ($300,000 with his or her spouse if married) and have the expectation to make the same amount the current year. Acquisition: This is when another company buys your company. You and your investors divide the proceeds according to your percent of ownership. The acquiring company views your business as advantageous to their own growth strategy. Advanced Technologies: These are state-of-the-art proprietary products, processes, materials, designs, and/or know-how. Advisory Board: These are individuals you know and trust who can assist you in the stages of the Entrepreneurial Path before a Board of Directors is needed. Working with an advisory board can be an effective way to learn to operate with a formal board. Angel Investor: An angel investor is a wealthy individual who meets the criteria of accredited investor and provides capital for a startup business in return for ownership shares in the business or convertible debt. Angels often organize into angel groups or angel networks to share deal flow, due diligence on potential investment companies, and to pool their investment capital. Anti-dilution Terms: In Seed, Startup, and Early Stage companies, the value of the company often goes down before it goes up. Investors will create terms to protect their percentage of ownership and the price of their original shares when future investment occurs in case subsequent investors force a lower valuation than the previous investors. That protection often comes at the expense of the common shares. Banks: Local banks, and to some extent national ones, may be a source of lines of credit, traditional borrowing, or convertible debt. Big Ideas: These are the kind of ideas that entrepreneurs base companies on. See Big Problems and Big Markets. Big Markets: A Big Market is enough potential customers who would be willing to pay for your company’s product or service to create a profitable self-sustaining business. To grow your company along the Entrepreneurial Path, your Big Idea must solve a Big Problem for a Big Market.