Fab Labs
Fab Labs are open workshops that provide technology that is otherwise difficult to access. Interested startups can develop their first products there free of charge. Typical Fab Lab equipment includes 3D printers, laser cutters and CNC milling machines.
Financing Round
A financing round is the period in which a startup seeks new investments from one or more investors. The individual financing rounds are then labelled differently. The first is the seed round, the second financing round is the Series A. The rounds then continue in alphabetical order, i.e. Series B, Series C, etc.
First Mover Advantage
First Mover Advantage arises from being the first (“first-moving”) user of a market segment.
Flat Round
A flat round is a form of financing for startups. Many investors invest small amounts in the company. That reduces the risk for the individual investors and the startup receives sufficient capital for its project.
Founders’ Lockup
In a founders’ lockup, the founders are contractually prevented from selling their company shares for a certain period, if the company goes public. This measure ensures that the stock market can stabilise, and investor confidence is maintained.
Franchise
Franchising is a partnership-based sales system in which new entrepreneurs, the franchisees, are allowed to use an established business concept from existing companies, the franchisors, for a fee.
Freemium
Freemium is a business model whereby basic services are provided free of charge. More advanced features or premium services must be paid for. The term is a pun on “free" and "premium" to attract a broad user base, some of whom will later become paying customers.
Friendly Takeover
A friendly takeover occurs when a target company agrees to and supports the acquisition. The management of both companies, in particular the board of directors and management negotiate the terms of the takeover. Unlike a hostile takeover, a friendly takeover is characterised by open communication, joint planning and a shared vision for the future.
Full Ratchet
Full Ratchet is an anti-dilution clause in investment contracts that protects early investors from losing their shares in future financing rounds. This provision adapts the conversion price of preferred shares or convertible securities to the lowest price of a subsequent round of financing. This means that old investors receive additional shares to maintain their percentage share in the company.