Glossary of Terms on The Grid

An investor who raises capital on a deal by deal basis.

When residents form a business to buy the manufactured home park. Usually this business is established as a cooperative.

Senior debt is borrowed money (often from bondholders or banks that have issued revolving credit lines) that a company must repay first if it goes out of business.

Employee stock purchase plans (ESPPs) enable employees to buy company stock at a discounted rate, such as 15 percent. The plans offer a potential financial benefit to employees, encourage them to stay with the company for a certain period of time (otherwise they lose the benefit), and can promote employee loyalty to the business.

An accredited investor is an individual or business entity that's allowed to trade securities that may not be registered with financial authorities by satisfying at least one requirement regarding their income, net worth, asset size, governance status, or professional experience.

Philanthropy refers to charitable acts or other good works that help others or society as a whole, and can include donating money to a worthy cause or volunteering time, effort, or other forms of altruism.

An alternative minimum tax (AMT) places a floor on the % of taxes that a filer must pay to the government, no matter how many deductions or credits the filer may claim. The US currently has an alternative minimum tax for taxpayers who earn above certain income thresholds.

DisCOs are a set of organizational tools for people interested in commons-oriented and feminist cooperatives. An alternative to Decentralized Autonomous Organizations, or DAOs, DisCOs offer a distributed and cooperative model.

A buyer cooperative (or purchasing cooperative) is an organization owned and operated by a group of individuals or businesses who pool their purchasing power to buy goods or services in bulk at discounted prices. Members benefit from lower costs, better terms, and increased negotiating leverage that they wouldn't have as individual buyers. Common examples include grocery co-ops, healthcare purchasing groups, and business supply cooperatives.

A hedge fund is an LP of private investors whose money is pooled and managed by professional fund managers who use a wide range of strategies to earn above-average investment returns. A hedge fund investment is often considered a risky, alternative investment choice.

A determination letter, issued by the IRS, confirms whether an employer's employee benefit plan meets the legal standards for special tax treatment. This document is crucial for retirement plans and other benefit programs, ensuring compliance with laws like ERISA.

A business that issues surety bonds for financial guarantees. If the bonded party fails to perform, the bonding company will cover the costs, acting as a safety net for the person hiring the bonded party.

Transferable value refers to the value derived from financial performance of a business that is not tied to a specific individual or the original owner

An interest rate swap is a financial contract where one party exchanges future interest payments with another based on a specified principal amount. These involve switching between fixed and floating interest rates to hedge against rate fluctuations or secure favorable terms.

Earnings per share (EPS) is a measure of a company's profitability that indicates how much profit each outstanding share of common stock has earned. It's calculated by dividing the company's net income by the total number of outstanding shares.

A susu is an informal savings club from West African tradition, common in African and Caribbean communities. Members contribute fixed amounts regularly to a communal pot. Each cycle, the total sum is paid out to one member until all have received their share, without interest

The factors that drive how salable the business will be after its near term succession, i.e., a follow up sale, such as post employee ownership conversion.

In the Explore stage, a business owner learns the benefits and options of different exit options and decides where to invest further time and resources. The essential question is whether a given exit option will meet the outcomes desired by the seller.

Asset-based lending involves providing loans secured by collateral, typically used by businesses to cover short-term cash flow needs. Collateral for these loans can include inventory, accounts receivable, equipment, or other owned property.

Money owed for a good or service purchased on credit. Accounts payable are a current liability for a company and are expected to be paid within a short amount of time.

A CDC is a nonprofit, community-based organization with one-third of board typically composed of community residents focused on low-income, underserved neighborhoods.

CLTs are nonprofit, community-based organizations designed to ensure community stewardship of land.

The accounts receivable turnover ratio assesses how efficiently a company collects its average accounts receivable balance. Calculated by dividing net credit sales by average accounts receivable, this ratio reflects how quickly credit sales are converted into cash

a financial services company that acts as an intermediary in large and complex financial transactions; usually involved when a startup company prepares for its launch of an IPO and during strategic M&A; or as a broker or financial adviser for large institutional clients

A C corporation (C corp) is a legal structure where the corporation and its owners (shareholders) are taxed separately, leading to double taxation on profits at both corporate and personal levels.

CMF awards competitive grants to CDFIs for affordable housing and economic development projects.

A chart of accounts is a list of categories that bookkeepers and accountants use to classify all accounting transactions. All accounts in the chart of accounts fall into one of the five categories: Income, Expense, Asset, Liability, or Equity.

A commercial loan is a debt-based funding arrangement between a business and a financial institution such as a bank.

Net profit margin, or net margin, expresses a company's net income as a percentage of its revenue. This metric provides insight into how efficiently sales translate into actual profit after accounting for all expenses, including COGS, operational costs, interest, and taxes.

A Zebra Company represents a humane alternative to traditional tech unicorns. Unlike unicorns that prioritize maximizing shareholder value, zebras focus on principles like mutualism, shared property, and multi-stakeholder value.