TERMS AND DEFINITIONS FOR INNOVATION ECOSYSTEM

Accelerator

A mentorship and training program designed to boost a startup's growth rate, accelerators are cohort-based, fixed-term, and generally conclude with a showcase or pitch event.

Angel Investor

An investor who help a founder get an idea off the ground. Angels generally invest at an earlier stage than venture capitalists.

Commercialization Program

A program similar to an accelerator, but sponsored by one or more major organizations. Commercialization programs assist early and growth-stage startups in areas that could benefit the program sponsors. When sponsorship is corporate, the commercialization process usually includes an opportunity to license or pilot the startup's product with the sponsor. Commercialization programs do not generally require the startups to surrender equity or IP.

Corporate Investment Funds:

Also known as corporate venture capital (CVC), these funding groups contribute capital directly to startup companies in exchange for an equity stake. A CVC generally hopes to gain specific competitive advantage from a startup, and may provide management or marketing expertise.

Early / Seed Stage

A company in the early / seed stage is at the beginning of its life cycle. Seed funding is contributed by investors (in exchange for equity) to support a business until it can generate cashflow.>/p>

Economic Development Department

An organization created by states, local governments, utilities, companies, and industry groups to promote overall economic growth, job creation, and return on state investment of various economic development services. Economic Development Departments connect companies to resources, capital, incentives, and subsidies for rent and land.>/p>

Incubator

A program, location, or business entity that helps startups or early-stage businesses learn and grow. Incubators can provide office space, mentorship, training, access to resources, and more.

Innovation Center

A large company's designated space where small team(s) work on new concepts. Innovation centers are often physically separate from the corporate mothership, helping innovators avoid a knee-jerk 'we've always done it this way' response. Innovation Centers are commonly networked with incubators and accelerators to exchange ideas and talent.

Maker Space

A shared workspace for the design and production of tangible or (less often) intangible outputs. These spaces have a variety of maker equipment including 3D printers, laser cutters, CNC machines, soldering irons and even sewing machines. Maker Spaces usually have on site staff/volunteers to assist in the use of equipment for safety purposes.

Public Development Authority(PDA):

A government-owned corporation to promote and support economic development in the community. A PDA is legally separate from the city or county under which it is established.

Series Rounds

Series rounds (Series A, Series B, etc) are sequential fundraising rounds where a company makes shares available for purchase by investors. It is expected that each funding round's capital raise is sufficient to tide the company over till the next round, generally 6-24 months. For example, a startup raising a $5 million Series A round might fill it with 6 half million dollar investors and a single $2M investor. This Series A funding would support the startup's early growth, product development, branding, and early hires until the next year's raising of a Series B (to support mid-stage growth), eventually followed by a Series C, D, etc. Raise rounds continue until the company loses momentum and fails to garner investor interest, generates enough cashflow to preclude the need for additional rounds, exits, or holds an IPO.

State Investment Funds

Funding controlled by state government entities to promote economic development.  State investment funding is usually tied to an agreement to locate the resulting commercial activity within the state.

University Investment Funds

Funding controlled by universities to support the commercialization of technologies developed within the university.

Venture Capital

A type of financing provided to early-stage companies, usually in exchange for an ownership stake in that company. VC is generally considered a high-risk, high-reward investment vehicle.

Design and Coding Schools

These schools teach practical skills related to coding and designing and often offer 12 week boot camp style workshops to learn a new code skill or software language.

Crowdfunding

Crowdfunding is a method of raising capital through the collective effort of friends, family, customers, and individual investors.

Workspaces

These spaces provide places for individuals to work alongside others in a common meeting space. These place typically provide a desk, internet connectivity, and meeting space for individuals and are generally open to the public on a daily/monthly rent basis.

Business Support Programs

Programs to support the growth and general business needs of existing businesses, but can also be helpful to startups.  These programs can be offered by private organizations, universities, as well as local, state and federal government entities.