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Principles of Management

Key Terms

Principles of ManagementKey Terms
angel investors
Individual investors or groups of experienced investors who provide financing for start-up businesses by investing their own funds.
business plan
A formal written statement that describes in detail the idea for a new business and how it will be carried out; includes a general description of the company, the qualifications of the owner(s), a description of the product or service, an analysis of the market, and a financial plan.
debt
A form of business financing consisting of borrowed funds that must be repaid with interest over a stated time period.
entrepreneurs
People with vision, drive, and creativity who are willing to take the risk of starting and managing a business to make a profit, or greatly changing the scope and direction of an existing firm.
equity
A form of business financing consisting of funds raised through the sale of stock (i.e., ownership) in a business.
intrapreneurs
Entrepreneurs who apply their creativity, vision, and risk-taking within a large corporation, rather than starting a company of their own.
small business
A business with under 500 employees that is independently managed, is owned by an individual or a small group of investors, is based locally, and is not a dominant company in its industry.
Small Business Administration (SBA)
A government agency that speaks on behalf of small business; specifically it helps people start and manage small businesses, advises them in the areas of finance and management, and helps them win federal contracts.
Small Business Investment Company (SBIC)
Privately owned and managed investment companies that are licensed by the Small Business Administration and provide long-term financing for small businesses.
venture capital
Financing obtained from venture capitalists, investment firms that specialize in financing small, high-growth companies and receive an ownership interest and a voice in management in return for their money.
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