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1895 B Post Road Fairfield, CT 06824 P: 203-256-5955 F: 203-256-9949 |
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| Preparing a Business Plan | Glossary | University Business Cards | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Business Plan Competition for Connecticut Universities |
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THE COMPETITION
Note: There are competitions for both Fall and Spring classes. The entire process is paperless and on line. You will be asked the following questions about your business plan:
ELIGIBILITY REQUIREMENTS for COLLEGIATE COMPETITION The judges will only consider information contained in the online application. Do not mail or email supplemental material. CONTEST CATEGORIES
AWARDS: · All entrants will receive candid feedback from a business financing expert on their on-line executive summary plus an invitation to a Connecticut Venture Group meeting. · Category winners may exhibit at a Connecticut Venture Group meeting. · Each category winner each semester will receive an unrestricted grant of $2500. Checks will be made out in the name of the Company. (The category awards will depend heavily on the academic aspects of the presentation. A polished, text-book perfect presentation might win out over a superior business concept.) · In the Spring, three Start-Up Grants will be awarded to three companies in the amounts of $25,000 $10,000 and $5,000, based on the following criteria: · Probability of success (soundness of concept, barriers to entry, commitment and skill of management) · Potential contribution to growth of economy and return for investors (sales and profit potential) · The relative difference a grant would have on bringing a company closer to launch · The potential for job creation and other value to society · One technology finalists will receive a $10,000 grant from Connecticut Innovations Inc. (CI) to start a businessin Connecticut. The grant will be announced in the spring, but entrants from both semesters are eligible. The Company must enroll in the CI Pre-seed Support Services Program and sign an affidavit that the business will be headquartered or have a majority of its operations in Connecticut for at least 3 years. · The winning school in each category each semester will receive a trophy. · A press release announcing the finalists will be sent to all Connecticut media. Also, a press release and photos of the winners in each category will be forwarded to the media.
Note: the two Venture category winners from the Fall may re-enter in the Spring to compete for the Technology and Start-Up Grants; but will not be eligible to win their category prize again in the Spring.
THE APPLICATION PROCESS
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Resources for Preparing a Business Plan
Audiovisual Presentation |
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Presentation Guidelines
Business
Positioning
Market Opportunity
Be prepared to answer the following
questions from investors:
Be prepared to answer the following:
Be prepared to answer the following:
Product
Development
Be prepared to answer the following:
Marketing
and Sales
If you rely on indirect channels, explain:
Be prepared to answer the following:
Management
Team
Be prepared to answer the following:
Be prepared to answer the following:
Projected
Financials
Be prepared to answer the following:
Requested
Funding / Use of Funds
Be prepared to answer the following:
Exit
Strategy
If you anticipate being acquired…
Be prepared to answer the following:
Be prepared to answer the following: |
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Abandonment option. The option of terminating an investment earlier than originally planned. Abnormal returns. The component of the return that is not due to systematic influences (market-wide influences). In other words, abnormal returns are above those predicted by the market movement alone. ACCELERATION REQUEST. A request to the SEC to waive the statutory 20-day waiting period and declare the registration statement effective at an earlier date. Accounting exposure. The change in the value of a firm's foreign currency-denominated accounts due to a change in exchange rates. ACCREDITED INVESTOR. Potential investors who meet certain minimum net worth and income tests (as determined by the SEC) as they relate to certain exempt offerings. See also Sophisticated Investor, and consult with your legal counsel for further clarification. Act of state doctrine. This doctrine says that a nation is sovereign within its own borders, and its domestic actions may not be questioned in the courts of another nation. AGREEMENT AMONG UNDERWRITERS. An agreement among the members of the underwriting group/syndicate that specifies, among other things, the managing underwriter and the terms of the underwriting. AICPA (AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS). The organization that governs and disciplines the conduct of certified public accountants and establishes standards for the profession. ALL HANDS MEETING. A meeting that occurs during preparation for an IPO that is attended by company representatives, company counsel, the independent accountants, underwriters, and underwriters' counsel. ALL-OR-NONE. A specific type of a best efforts underwriting: If the underwriter is not able to sell all of the shares being offered, none of the shares will be offered and the offering will be canceled. AMERICAN STOCK EXCHANGE (AMEX). One of the major stock exchanges. ANALYST. An individual, usually employed by an investment banking firm, who studies and analyzes an industry and the publicly held companies operating within the industry for the purpose of providing investment advice. ANGEL INVESTOR (ANGEL). Individuals who invest in businesses looking for a higher return than they would see from more traditional investments. In return for their investment they often are highly involved in the business. Usually they are the bridge from the self-funded stage of the business to the point that the business needs the level of funding that a venture capitalist would offer. Funding estimates vary, but usually range from $50,000 to $1.5 million. ANTIDILUTIVE SECURITIES. Securities whose assumed exercise would create an increase in earnings per share or a reduction in net loss per share; these securities are generally excluded from the computation of earnings per share. BEST EFFORTS OFFERING. An underwriting agreement where the underwriters use their best efforts to sell the stock; however, the underwriters have no obligation to purchase stock not purchased by investors. BID AND ASK. The quoted prices of securities traded in the over-the-counter market. The bid price is the highest price a buyer is willing to offer, while the ask price is the lowest price a seller is willing to accept. The difference between the bid and ask prices is known as the "spread." BLUE SKY LAWS. The name applied to the securities laws of various states enacted to protect investors. While the SEC regulations are national in application, various states have securities laws that affect public offerings. BLUE SKY MEMORANDUM. A memorandum setting forth the various securities law provisions and restrictions applicable to each of the states in which the offering is to be made. The memorandum is usually prepared by legal counsel. BOOK VALUE PER SHARE. A share of stock's equity value, computed by dividing a company's net worth (assets minus liabilities) by the number of shares outstanding. BOOK VALUE STOCK PLANS. Plans in which restricted stock (or options) is sold to employees based on book value and the company buys back the stock (or options or shares received upon exercise of the options) at a later date, usually at its then net book value. BROKER. A commonly used term applied to individuals or firms that trade securities. Brokers execute trades of securities between buyers and sellers in return for a fee or commission. Brokers do not own the securities in which they trade and, accordingly, do not share in the risks or rewards of ownership. BUSINESS VALUATION. An estimate of the worth of a business entity and its assets. CAPITALIZATION. The total amount of a company's outstanding securities. For purposes of display in a registration statement, capitalization includes short-term debt, long-term debt and equity securities. CAPITALIZATION TABLE. A table presenting the capital structure of the company, both prior to the offering and assuming that all securities offered are sold. CARVED-OUT ENTITY. A subsidiary, division, or lesser business component that is separated from another entity. This carved-out entity may become a separate registrant through an IPO. CHEAP STOCK. Common stock, stock options, warrants, or other potentially dilutive instruments issued to employees, consultants, directors, promoters, or others providing services to an issuer at a price lower than the public offering price. CLOSELY HELD COMPANY. A company where the equity interests are held by a few individuals or group of individuals. CLOSING. The final meeting of the going-public process in which the company delivers its registered securities to the underwriter and receives payment for the issue. The closing is usually five to seven days after the effective date of the registration statement. CO-MANAGER. In an underwriting, if there is a second (or third) managing underwriter representing the syndicate, that securities firm will be known as a "co-manager." COMFORT LETTER. A letter written by independent accountants to the underwriter as part of the underwriter's due-diligence reviews. The letter discusses the results of agreed-upon procedures applied to the company's financial data, as requested by the underwriters. Comfort letters provide "negative assurance" to the underwriter and are not included in the registration statement. COMMENT LETTER. A letter written by the SEC's review staff that requests modification to the registration statement or the inclusion of additional information. CONFORMED COPY. A registration statement or other document displaying signatures that are printed or typed rather than signed manually. All EDGAR documents are conformed copies. However, each signatory to that electronic filing also must manually sign a signature page acknowledging the signature that appears in typed form within the electronic filing. The manual signature is executed before or at the time the electronic filing is made. CONSENT. A document giving consent to the use of an independent accountant's or other expert's report and name in the registration statement. A conformed document is filed with the registration statement while a manually signed copy is kept by the registrant. CONTROL STOCK. Limited transferability stock owned by individuals who control the company. CONVERTIBLE SECURITIES. Corporate securities (usually preferred stock or bonds) that are exchangeable into a fixed number of shares of common stock at a stipulated price. COOLING-OFF PERIOD. See Waiting Period. DERIVATIVES. Financial instruments whose value is based on another security, commodity, or index. DILUTION. A reduction in a shareholder's relative ownership percentage of a company or the company's earnings per share (EPS) as a result of the company's issuance of more shares. Dilution in an IPO results from a disparity between the IPO price and the net book value of tangible assets for existing shares and is usually reflected in the registration statement in tabular format, referred to as a dilution table. DILUTIVE SECURITIES. Securities whose issuance or exercise would decrease earnings per share. DIRECTORS'/OFFICERS' QUESTIONNAIRES. Questionnaires circulated by the company's and underwriter's counsel during the registration process. The questionnaires gather and confirm various data that must be disclosed in the registration statement. DISSOLUTION. The process of liquidating a partnership or a corporation. DIVISION OF CORPORATION FINANCE. A division of the SEC which, among other things, reviews registration statements filed with the SEC. DUE DILIGENCE. A reasonable investigation conducted by the company's officers and directors, underwriters and lawyers to provide a reasonable ground for belief that, as of the effective date, the registration statement contains no significant untrue or misleading information and that no material information has been omitted. EARLY STAGE. Seed Financing, Start-up Financing and First-Stage Financing EARN-OUT ARRANGEMENTS. Arrangements in a business acquisition in which sellers receive additional future consideration for their security interests usually based on future earnings. EARNINGS PER SHARE (EPS). A company's net income, generally divided by the number of its common shares outstanding and adjusted for certain dilutive securities such as stock options, warrants, and convertible debt. EFFECTIVE DATE. The date the SEC allows the registration statement to become effective and the sale of securities may commence. ELECTRONIC DATA, GATHERING, ANALYSIS, AND RETRIEVAL (EDGAR) SYSTEM. The SEC's electronic system for filing registration statements and periodic reports under the 1933 and 1934 Acts. EMPLOYEE STOCK OWNERSHIP PLAN (ESOP). A plan instituted by a company that gives stock to its employees. The primary purpose of such a plan is to attract and retain good officers and employees. EQUITY METHOD. Method of accounting in which the investor records an investment in the stock of an investee at cost and adjusts the carrying amount of the investment to recognize the investor's share of the earnings or losses of the investee after the date of acquisition (generally applies to investments where stock ownership is between 20 and 50 percent of the outstanding securities of the investee). ESCROW ACCOUNT. An account in which the offering proceeds are kept prior to closing, usually in a best efforts underwriting. EXEMPT OFFERING. A securities offering that does not require a registration statement to be filed with the SEC. Exempt offerings include Regulations A and D and intrastate offerings. EXPERTS. Independent accountants, engineers, or others whose proficiency in a specific area qualify them as specialists in their fields. F-SERIES FORMS. Forms used by foreign companies to comply with the 1933 and 1934 Acts. Examples include (1) Forms F-1 through F-10, registration statements similar to Forms S-1 through S-4 and Forms SB-1 and SB-2, and (2) Form 20-F, an annual report similar to Form 10-K. FAMILY LIMITED PARTNERSHIPS. A partnership set up to transfer wealth to family members while maintaining control over the income-producing property. The donor would generally be the general partner while the heirs would be the limited partners. The general partners maintain control over the assets with respect to voting, investment decisions, and liquidation while the limited partners will not participate in these decisions. Establishment of family limited partnerships can be used as a tax strategy to distribute assets to family members without triggering a taxable event. FIDUCIARY LAWS. Laws that require transactions between a company and its officers, directors, or large shareholders to be fair to the company. These laws apply to privately held as well as publicly held companies. FINAL PROSPECTUS. A document that must be circulated to all purchasers of stock disclosing material facts about the company's operations, its financial status and the details of the offering. It is often preceded by a preliminary prospectus, also known as a red herring. FINANCIAL ACCOUNTING STANDARDS BOARD (FASB). A private body that establishes financial accounting and reporting standards in the United States. FINANCIAL PRINTER. A printer that specializes in the printing of financial documents-including registration statements, prospectuses, and proxy statements. These printers are also capable of converting your documents to an EDGAR format and electronically submitting the document to the SEC. FINANCIAL REPORTING RELEASES (FRRs). Releases designed to communicate the SEC's positions on accounting principles and auditing practices. FIRM COMMITMENT UNDERWRITING. A type of offering in which the underwriter agrees to purchase all of the shares being offered regardless of whether investors purchase the shares. Any shares not sold to the public are paid for and held by the underwriters for their own account. FIRST STAGE FINANCING. Financing of market release. FOREIGN CORRUPT PRACTICES ACT (FCPA). An amendment to the 1934 Act that requires reporting companies to keep adequate accounting records, maintain adequate internal accounting control systems, and not make certain payments to specified foreign officials and politicians. FOREIGN SALES CORPORATION. Entities recognized by the Internal Revenue Code that may eliminate or defer payment of U.S. corporate income taxes on a portion of the income generated from export sales. FORM 8-K. A form required to be filed with the SEC when certain significant reportable events occur (e.g., major acquisitions or legal proceedings). FORM 10-K. An annual report required to be filed with the SEC pursuant to the 1934 Act. Form 10-K includes annual financial statements, related schedules, and various textual information. FORM 10-KSB. An annual report form required by the 1934 Act that may be filed with the SEC by small business issuers under Regulation S-B. FORM 10-Q. A quarterly report required to be filed with the SEC pursuant to the 1934 Act; consists primarily of the company's quarterly financial statements. FORM 10-QSB. A quarterly report required by the 1934 Act that may be filed with the SEC by small business issuers under Regulation S-B. FORM S-1. The most common form of registration statement used in the initial public offering of securities by issuers for which no other form is authorized or prescribed. FORM S-2. The registration statement used by companies that have been subject to the 1934 Act reporting requirements for at least 36 months and which combines incorporation by reference with delivery of the annual shareholder report and interim reports. FORM S-3. A short-form registration statement available to companies that have been subject to the 1934 Act reporting requirements for at least 12 months and that meet certain market value or debt-rating tests. This registration statement also permits incorporation by reference, but does not require delivery, of the latest annual report to investors. FORM S-4. The registration form used to register shares offered in connection with business combinations (e.g., mergers, consolidations, exchange offers for securities of another entity). FORM SB-1. The registration form available to small business issuers to register up to $10 million of securities, to be sold for cash, in any continuous 12-month period. FORM SB-2. The registration form available to small business issuers to register securities to be sold to the public for cash. This form differs from Form SB-1 in that there is no limitation on the amount that can be raised in the offering. GIFT TAX EXCLUSION. An annual exclusion granted by the Internal Revenue Service that allows a donor to give up to $10,000 per year to an unlimited number of donees without incurring gift taxes. GOING PUBLIC. The process of a privately owned company selling its ownership shares to the investing public. See Initial Public Offering. GRANTOR RETAINED ANNUITY TRUST (GRAT). An irrevocable trust that provides an effective way to reduce gift tax on property while providing an income annuity to the grantor. At the termination of the trust, the trust principal is paid to the beneficiary of the trust. A GRAT allows the grantor to retain control while retaining income from the property granted. A GRAT works particularly well with appreciated property/stock. GREEN-SHOE OPTION/OVERALLOTMENT OPTION. An option contained in the underwriting agreement that allows the underwriter to purchase and sell additional shares if the market's demand for the shares is greater than originally expected. GROSS PROCEEDS. The total dollar amount raised through an initial public offering, before deduction of discounts or commissions for underwriters and for expenses for legal, auditing, printing, filing, and blue sky laws. IN REGISTRATION. The status of a company that has filed a registration statement with the SEC prior to the date the SEC declares the registration statement effective. INCORPORATION BY REFERENCE. Certain materials previously filed with the SEC which may, under certain conditions, be referred to rather than included in the text of subsequently filed documents. INDUSTRY GUIDES. Guides followed by the SEC staff requiring the disclosure of policies and practices by certain industries. INDUSTRY POP/INDUSTRY FLURRY. An industry where there has been a significant number of successful IPOs. Generally, in that industry, there may be many "me too" companies trying to follow the leaders. INITIAL PUBLIC OFFERING (IPO). The offering or sale of a company's securities to the investing public for the first time (i.e., converting a company from private to public ownership). INSIDER TRADING. The sale or purchase of a company's securities by directors, officers, and others. See Insiders. INSIDERS. Individuals that may have access to nonpublic information, e.g., officers, directors, and major shareholders. INSTITUTIONAL INVESTORS. Nonindividual shareholders. Institutional investors include pension funds, mutual funds, and trusts. INTERIM FINANCIAL STATEMENTS. See Stub-Period Financial Information. INTRASTATE OFFERING. A securities offering limited to investors residing in the state in which the issuer is doing a significant portion of its business. Such offerings are usually exempt from registration with the SEC. INVESTMENT BANKER. A person or (usually) a firm that, among other things, underwrites securities, functions as a broker/dealer, and performs corporate finance and merger and acquisition advisory services. Investment bankers are usually full-service firms that perform a range of services, as opposed to an underwriter or broker/dealer, which only provides one specific service. IPO BACKLOG. The number of companies that have filed initial registration statements with the SEC but whose registration statements are not yet effective. Also, an estimate of the gross offering amount of those companies. ISSUE. A block of securities sold to investors by a company through an offering. ISSUER. A company offering its securities for sale. JOINT VENTURE. An arrangement whereby two or more parties (the venturers) jointly control a specific business undertaking and contribute resources towards its accomplishment. LEGENDED STOCK. See Restricted Stock. LETTER OF INTENT. A nonbinding letter from the underwriter to the company that sets forth the general terms and conditions of the securities offering. LETTERED STOCK. See Restricted Stock. LEVERAGED BUYOUT. An acquisition of a company financed largely by debt. LIMITED OFFERING. An offering of securities exempt from registration due to exemptions for the size of offering and the number of purchasers. LISTING APPLICATION. A document, similar in nature to a registration statement, formally requesting that an issuer's securities be listed on a national securities exchange. LOCK-UP PERIOD. Usually appears as a provision in the underwriting agreement. Represents the period of time after an IPO during which (at the underwriter's request) insiders are prohibited from selling their shares. This period can range from a few months to several years. MAKING A MARKET. The process by which a securities dealer supports the trading activity of a particular security. The process may include the dealer S CORPORATIONS. Corporations that have 35 or fewer shareholders and meet certain other requirements of the Internal Revenue Code. An S corporation is taxed by the federal government and some states in a manner similar, but not identical, to a partnership. SAFE HARBOR RULE. SEC provisions that protect issuers from legal action if specified requirements have been satisfied or, in certain cases, if a good-faith effort has been made to comply with specified requirements. Second-stage Financing. Growth financing for market penetration. SECONDARY OFFERING. An offering by the company's shareholders to sell some or all of their stock to the public. The proceeds of a secondary offering are received by the selling shareholders, not by the company. SECURITIES ACT OF 1933 (1933 ACT). Under the 1933 Act, a registration statement containing required disclosures must be filed with the SEC before securities can be offered for sale in interstate commerce or through the mail. The 1933 Act also contains antifraud provisions that apply to offerings of securities. SECURITIES AND EXCHANGE COMMISSION (SEC). The SEC is the federal agency responsible for regulating sales and trading of securities through its administration of the federal securities laws, including the 1933 and 1934 Acts. SECURITIES EXCHANGE ACT OF 1934 (1934 ACT). The 1934 Act requires companies registered under the 1933 Act to file periodic reports (e.g., Forms 10-K and 10-Q) with the SEC and to disclose certain information to shareholders. Companies traded over the counter with 500 or more shareholders and tota | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
