Glossary

absorptive capacity	A firm's ability to assimilate new knowledge for the production of innovations. The more related knowledge a firm has, the easier it is for it to assimilate the new knowledge.
acquisition	When one firm purchases another, the acquired company gives up its independence and the surviving firm assumes all assets and liabilities.
adaptive enterprise	An enterprise that changes its strategy or business model, as the conditions of the marketplace require.
advertising revenue model	Selling firm, usually media companies, provides space or time for advertisements and collects revenues for each use.
affiliate revenue model	A model based on steering business to an affiliate firm and receiving a referral fee or percentage of revenues.
alliance	See partnership.
angels	Wealthy individuals, usually experienced entrepreneurs, who invest in business start-ups in exchange for equity in the new ventures.
architectural innovation	A change in how components of a product are linked together while core design concepts are left untouched.
asset	Something of monetary value that is owned by a firm or an individual.
asset velocity	Ratio of sales to net assets.
balanced scorecard	A strategy formulation device as well as a report of performance.
barriers to entry	Whatever keeps a firm from entering an industry or market.
base case	The calculation of cash flows based on a set of assumptions that portray outcomes that are most likely to happen.
best customer	One who values your brand, buys it regularly whether your product is on sale or not, tells his or her friends about your product, and will not readily switch to a competitor.
board of advisors	A group constituted to provide advice and contacts to a venture. The members have extensive skills and knowledge and provide good advice.
board of directors	A group composed of key officers of a corporation and outside members responsible for the general oversight of the affairs of the entity.
book value	The net worth (equity) of the firm, calculated by total assets minus intangible assets (patents, goodwill) and liabilities.
bootstrap financing	Launching a start-up with modest funds from the entrepreneurial team, friends, and family.
brand	A combination of name, sign, or symbol that identifies the goods sold by a firm.
brand equity	The brand assets linked to a brand's name and symbol that add value to a product.
breakeven	The point at which the total sales equal the total costs.
burn rate	Defined as cash in minus cash out on a monthly basis.
business design	A design that incorporates the venture's selection of customers, its offerings, the tasks it will do itself and those it will outsource, and how it will capture profits.
business-format franchise	Involves the provision of a complete method including a license for the trade name and logo, the products and methods, the form of the physical facility, the strategy, and the purchasing system.
business method patent	A type of a utility patent that involves the classification of a process.
business model	A set of planned assumptions about how a firm will create value for all its stakeholders; the resulting outcome of the business design process.
business plan	A document that describes the opportunity, product, context, strategy, team, required resources, financial return, and harvest of a business venture.
cannibalization	The act of introducing products that compete with a firm's existing product line.
capacity	The ability to act or do something. A firm has processes and assets that need to be expanded as the firm grows its sales volume.
cash flow	The sum of retained earnings plus the depreciation provision made by a firm. The cash coming into a firm minus the cash going out over a predetermined time period.
C-corporation	A business that provides limited liability, unlimited life, the ability to accept investments from other corporations, and the ability to merge with other corporations.
certain	An outcome resulting from an action in that it will definitely happen.
challenge	A call to respond to a difficult task and the commitment to undertake the required enterprise.
champion	An executive or leader in the parent company who advocates or provides support and resources as well as protection of the venture when parent company routines are breached. The champion helps describe and defend the venture and secure the necessary resources.
chasm	A large gap between visionaries and pragmatists in the adoption process.
cluster	A geographic concentration of interconnected companies in a particular field. Clusters can include companies, suppliers, trade associations, financial institutions, and universities active in a field.
collaborative structure	Primarily consists of teams with few underlying functional departments. In a collaborative structure, the operating unit is a team that may consist of 5 to 10 members.
competitive advantage	A firm's distinctive factors that give it a superior or favorable position in relation to its competitors.
competitive intelligence	The process of legally gathering data about competitors.
complement	A product that improves or perfects another product.
complementors	Companies that sell complements to another enterprise's product offerings.
concept summary	A simple statement of the problem the new venture is solving and how the new venture will act to solve it.
conjoint analysis	A quantitative measure of the relative importance of one attribute as opposed to another.
convergence	The coming together or merging of several technologies or industries thought to be different or separate.
copyright	An exclusive right granted by the federal government to the owner to publish and sell literary, musical, or other artistic materials. A copyright is honored for 70 years after the death of the author.
core competencies	The unique skills and capabilities of a firm.
corporate culture	The basic style of a company and how people work with each other.
corporate new venture (or corporate venture)	A new venture started by an existing corporation for the purpose of initiating and building an important new business unit or organization, solely owned subsidiary, or spin-off as a new public company.
corporate venture capital	An initiative by a corporation to invest in either young firms outside the corporation or units formerly part of the corporation. These are often organized as corporate subsidiaries, not as limited partnerships.
corporation	A legal entity separate from its owners. A body of owners granted a charter to act as a separate entity distinct from its owners.
cost driver	Any expense that impacts total firm costs: fixed, variable, semi-variable, and nonrecurring.
creative destruction	The creation of new industrial structures and companies and the destruction of older structures.
creativity	The ability to use the imagination to develop new ideas, new things, or new solutions.
customer relationship management	A set of conversations that consist of (1) economic exchanges, (2) the product offering that is the subject of the exchange, (3) the space in which the exchange takes place, and (4) the context of the exchange with the customers.
customization	Provision of a product designed to meet a user's preferences.
debt capital	Money that a business has borrowed and must repay in a specified time with interest.
design	The activity leading to the arrangement of concrete details that embodies a new product idea or concept.
design patents	Grants of exclusive right of use for new original, ornamental, and nonobvious designs for articles of manufacture for a period of 14 years.
diffusion of innovations	The process by which innovations spread through a population of potential adopters.
diffusion period	The time required to move from 10 percent to 90 percent of the potential adopters.
discount rate	The rate (r) at which future earnings or cash flow is discounted because of the time value of money.
disruptive innovation	An innovation that uses new modules and new architecture to create new products.
dominant design	A design whose major components and underlying core concepts do not vary substantially from one product model to the other and that commands a high percentage of the market share for the product.
due diligence	Gathering and verifying facts and data provided in a business plan before making a commitment to the terms of an investment deal.
dynamic capitalism	The process of wealth creation characterized by the dynamics of new, creative firms forming and growing and old, large firms declining and failing.
dynamic disequilibrium	The constant change of factors in an economy.
e-commerce	Digitally enabled commercial transactions between and among organizations and individuals.
economic capital	The value of an economy and the associated standard of living.
economics	The study of humans in the ordinary business of life. Economics can also be defined as the study of how society manages its scarce resources.
economies of scale	The concept that larger volumes sold reduce per-unit costs.
economies of scope	Economies obtained by sharing of resources by multiple products or business units.
elevator pitch	A short version of the venture story that quickly demonstrates that the entrepreneurs know their business and can communicate it effectively.
emergent industries	Newly created or re-created industries formed by product, customer, or context changes.
emotional intelligence	A bundle of four psychological capabilities that leaders exhibit: self-awareness, self-management, social awareness, and relationship management.
entrepreneur	(1) A person who undertakes an enterprise or business with the chance of profit or loss (or success or failure); or (2) a person or group that engages in the initiation and growth of a purposeful enterprise for the production of goods and services.
entrepreneurial capital	A combination of entrepreneurial competence and entrepreneurial commitment.
entrepreneurial commitment	A dedication of the time and energy necessary to bring the enterprise to initiation and fruition.
entrepreneurial competence	The ability (1) to recognize and envision taking advantage of opportunity and (2) to access and manage the necessary resources to take advantage of the opportunity.
entrepreneurial intensity	The degree of commitment of the entrepreneurial team to the growth of the firm.
entrepreneurship	Focused on the identification and exploitation of previously unexploited opportunities.
equity capital	The investment by a person in ownership through purchase of the stock of the firm.
ergonomics	The science of making a physical task easier and less stressful to accomplish.
ethics	A set of moral principles for good human behavior. Ethics provides the rules for conducting activities in a manner acceptable to society.
execution	A discipline for meshing strategy with reality, aligning the firm's people with goals, and achieving the results promised.
exit strategy	The way entrepreneurs or investors get their money out of a venture.
family-owned business	A firm that includes two or more members of a family who hold control of the firm.
financial capital	Financial assets such as money, bonds, securities, land, patents, and trademarks.
first-mover advantage	Gain accruing to the first to enter a market.
flexibility	A measure of a firm's ability to react to a customer's needs quickly.
flow-through entities	Firms where all profits flow to the owners free of prior taxation.
focus group	A small group of people who are brought together to discuss a product or service.
follower strategy	An entrant to a market that follows the initial one and attempts an improvement of the first mover's strategy.
founders	The people responsible for starting a firm, usually all the members of the initial leadership team.
franchise	A legal arrangement in which the owner of a business format has licensed it to an individual or a local firm.
franchisee	An individual or a local firm that receives the right through a contract to use the franchisor's business format, brand, and logo in a specific geographic region.
franchisor	The organization that owns and operates a firm that controls the business format and its associated trademarks and logo.
global	A strategy that emphasizes worldwide creation of new products, sales, and marketing.
globalization	The integration of markets, nation-states, and technologies enabling people and companies to offer and sell their products in any country in the world.
growing industries	Industries that exhibit moderate revenue growth and have moderate stability and uncertainty.
harvest plan	A plan that defines how and when the owners and investors expect to realize or attain an actual cash return on their investment.
high growth business	Characterizes a business corporation that aims to build an important new business and requires a significant initial investment to start up.
horizontal merger	A merger between firms that make and sell similar products in a similar market.
human capital	Combined knowledge, skill, and ability of the people in the enterprise.
hybrid model	This model, sometimes called "bricks and clicks," utilizes the best of the Internet as well as other channels. A hybrid model can extend a company's reach to new market segments as well as globally.
implementation	Putting into effect the elements of the business plan.
increasing returns	When the marginal benefits of a good or of an activity are growing with the total quantity of the good or the activity consumed or produced.
incremental innovation	An innovation that is a faster, better, and/or cheaper version of an existing product.
independent venture	A new venture that is not owned or controlled by an established corporation. An independent venture is typically unconstrained in its choice of a potential opportunity yet is usually constrained by limited resources.
industry	A group of firms producing products that are close substitutes for each other and serve the same customers.
initial public offering	The first public equity issue of stock by a company.
innovation	Invention that has produced economic value in the marketplace. It is the commercialization of new technology.
installed base profit model	One of the most powerful profit models; the supplier builds a large installed base of users who then buy the supplier's consumable products.
integrity	Truthfulness, wholeness, and soundness; the consistency of our words and our actions or our character and our conduct.
intellectual capital	The sum of knowledge assets of an organization.
intellectual property	The valuable intangible property owned by persons or companies.
international	A strategy that aims to create value by transferring products and capabilities from the home market to other nations using export or licensing arrangements.
internet	A worldwide network of computer networks linking businesses, organizations, and individuals.
intrepreneurship	The entrepreneurial process within the confines of an established corporation.
IPO	See initial public offering.
joint venture	A short-lived partnership with each partner sharing in the costs and rewards of the project; common in research, investment banking, and the health care industry.
just-in-time	A method that focuses on reducing unnecessary inventory and removing non-value-added activities by receiving items only when needed.
killer app	See disruptive application.
knowledge	The awareness and possession of information, facts, ideas, truths, and principles in an area of expertise.
knowledge management	The practice of collecting, organizing, and disseminating the intellectual knowledge of a firm for the purpose of enhancing its competitive advantages.
layout	The arrangement of a facility to provide a productive workplace. This can be accomplished by aligning the form of the space with its use or function.
leadership	The ability to create change or transform organizations. A real measure of leadership is the ability to acquire needed new skills as the situation changes.
lead users	People who have an advanced understanding of a product and are experts in its use.
lean systems	Operations systems that are designed to create efficient processes by using a total systems perspective.
learning organization	A firm that captures, generates, shares, acts, and uses its corporate experiences to improve and adapt.
license	A grant to another firm to make use of the rights of the licensor's intellectual property.
licensing	Occurs when a firm (the licensor) grants the right to produce its product, use its production processes, or use its brand name or trademark to another firm (the licensee). In return for giving the licensee these rights, the licensor collects a royalty fee on every unit the licensee sells.
limited liability company	A way of legally organizing a firm to limit liability of the participants.
local	A strategy focusing all efforts locally (or regionally) since that is the venture's pathway to a competitive advantage.
logistics	The organization of moving, storing, and tracking parts, materials, and equipment. Logistic systems usually are based on electronic networks such as a supply-chain intranet.
loyalty	A measure of a customer's commitment to a company's product or product line.
management	A set of processes such as planning, budgeting, organizing, staffing, and controlling that keep the organization running well.
marketing	A set of activities with the objective of securing, serving, and retaining customers for the product offerings of the firm. Marketing is getting the right message to the right customer segment via the appropriate media and methods.
marketing objectives statement	A clear description of the key objectives of the marketing program.
marketing plan	A written document serving as a section of the business plan and containing the necessary steps required to achieve the marketing objective.
market potential	A prospective of the maximum sales under expected conditions.
market research	The process of gathering the information that serves as the basis for a sound marketing plan.
market segment	A group with similar needs or wants and may include geographical location, purchasing power, and buying attitudes.
market segmentation	The division of the market into segments that have different buying needs, wants, and habits.
mature industries	Industries that have slow revenue growth, high stability, and intense competitiveness.
merger	The combining together of two companies.
metanational	A company that possesses three core capabilities: (1) being the first to identify and capture new knowledge emerging all over the world; (2) mobilizing this globally scattered knowledge to out-innovate competitors; and (3) turning this innovation into value by producing, marketing, and delivering efficiently on a global scale.
modular innovation	An innovation that uses new components and modules, but does not disrupt the linkages between modules.
module	An independent, interchangeable unit that can be combined with others to form a larger system.
moral principles	Tenets concerned with goodness (or badness) of human behavior and usually provided as rules and standards of human behavior.
multidomestic	A strategy that calls for a presence in more than one nation as resources permit.
natural capital	Those features of nature, such as minerals, fuels, energy, biological yield, or pollution absorption capacity, that are directly or indirectly utilized or potentially utilizable in human social and economic systems.
negotiation	A decision-making process among interdependent parties who do not share identical preferences.
net present value (NPV)	The present value of the future cash flow of a venture discounted at an appropriate rate (r).
network economies	Observed effects in industries where a network of complementary products is a determinant of demand.
new venture team	A small group of individuals who possess expertise, management, and leadership skills in the requisite areas.
new venture valuation rule	Uses the projected sales, profit, and cash flow in a target year (N) and the projected earning growth rate (g) for five years after year N to calculate value of a firm.
niche business	A firm that seeks to exploit a limited opportunity or market to provide the entrepreneurs with independence and a slow-growth buildup of the business.
nonprofit organization	A corporation or a member association initiated to serve a social or charitable purpose.
oligopoly	An industry characterized by just a few seller firms.
on-time speed	A measure of lead-time, on-time delivery, and product development speed.
open source innovation	An innovation that is the product of many firms and individuals working together under a common goal and an agreed-to governance system.
operation	A series of actions.
operations management	The supervising, monitoring, and coordinating of the activities of a firm carried out along the value chain. Operations management deals with processes that produce goods and services.
opportunity	A timely and favorable juncture of circumstances providing a good chance for a successful venture or progress; an auspicious chance of an action occurring at a favorable time.
opportunity cost	The value (cost) of the forgone action.
option	The right to purchase an asset at some future date and at a predetermined price.
organic growth	Growth enabled by internally generated funds.
organic organizations	Organizations that are flexible and effectively adapt to change.
organizational capital	An enterprise's management processes, work procedures, information technologies, and communication methods.
organizational culture	The bundle of values, norms, and rituals that are shared by people in an organization and govern the way they interact with each other and with other stakeholders.
organizational design	The design of an organization in terms of its leadership and management arrangements, its selection, training, and compensation of its talent (people), its shared values and culture, and its structure and style.
organizational norms	The guidelines and expectations that impose appropriate kinds of behavior for members of the organization.
organizational rituals	The rites, ceremonies, and observances that serve to bind together members of the organization.
organizational values	The beliefs and ideas of an organization about what goals should be pursued and what behavior standards should be used to achieve these goals. Values include entrepreneurship, creativity, honesty and openness.
outsourcing	Purchasing services or goods from suppliers rather than doing or producing them within the firm.
partnership	Business association of two or more people or firms who agree to cooperate with one another to achieve mutually compatible goals that would be difficult for each to accomplish alone. There are two types of partnerships: the general partnership and the limited partnership.
patent	A grant by the U.S. government to an inventor giving exclusive rights to an invention or process for 20 years. A U.S. patent does not always grant rights in foreign countries.
PE ratio	The ratio of the price of a stock to the company's earnings.
personalization	The provision of content specific to a user's preferences and interests.
pessimistic case	When the outcome of the calculation of cash flows, based on a set of assumptions, is less than expected.
place	The channels for distribution of the product and, when appropriate, the physical location of the stores.
plant patent	A grant of exclusive right of use for a term of 20 years for certain new varieties of plants that have been asexually reproduced.
positioning	The act of designing the product offering and image to occupy a distinctive place in the target customer's mind.
post-money value	The valuation accorded a company after investment by venture capitalists or angels.
preferred stock	Stock with preferences or claims on dividends and assets before common stock owners.
pre-money value	The value accorded a company before investment from venture capitalists or angels.
pricing policies	Methods for setting prices for various customer categories and volume discount plans.
private placements	The sale of stocks or bonds to wealthy individuals, pension funds, insurance companies, or other investors without a public offering or any oversight from the Securities and Exchange Commission.
process	Any activity or set of activities that takes one or more inputs, transforms and adds value to them, and provides one or more outputs.
product	The item or service that serves the needs of the customer.
product-distribution franchise	A license to sell specific products under a manufacturer's trademark and brand.
productivity	The quantity of goods and services produced from the sum of all inputs, such as hours worked and fuels used.
product offering	Communicates the key values of the product and describes the benefits to the customer.
product platform	A set of modules and interfaces that form a common architecture from which a stream of derivative products can be efficiently developed and produced.
product sales model	Sales of a product in units to a customer. Selling items for a price.
profit	The net return after subtracting the costs from the revenues.
profit margin	The ratio of profit divided by sales revenues.
profit model	The mechanism a firm uses to reap profits from its revenues.
pro forma	Provided in advance of actual data. Pro forma statements are forecasts of financial outcomes.
promotion	The communication of an initial product message using public relations, advertising, and sales methods to attract customers.
proprietary	That which is owned, such as a patent, formula, brand name, or trademark associated with the product or service, and not usable by another without permission.
prototype	A model that has the essential features of the proposed product or service but remains open to modification.
public offering	The sale of a company's shares of stock to the public by the company or its major stockholders.
quality	A measure of a product that usually includes performance and reliability.
radical innovation	An important new development that leads to a new industry or way of operating.
rapid prototyping	The fast development of a useful prototype that can be used for collaborative review and modification.
real option	The right to invest in (or purchase) a real asset (the start-up firm) at a future date.
regional	See local.
regret	The amount of loss that a person can tolerate.
regular taxable corporation	An enterprise subject to taxes on its reported profits.
relational coordination	Describes how people act as well as how they see themselves in relationship to one another.
reliability	A measure of how long a product performs before it fails.
resilience	The ability to recover quickly from setbacks. It is a skill that can be learned and increased.
restricted stock	Stock issued in an employee's name and reserved for his or her purchase at a specified price after a period of time.
return on capital	The ratio of profit to the total invested capital of a firm.
return on equity	The ratio of net income divided by owner's equity.
return on invested capital	The ratio of net income to investment.
return on investment (ROI)	The ratio of net income divided by invested capital.
revenue model	Describes how the firm will generate revenue.
revenues	A firm's revenues are its sales in dollars expressed after deducting for all returns, rebates, and discounts.
risk	The chance or possibility of loss, which could pertain to finance, physicality, or reputation. Risk is a measure of the potential variability that will be experienced in the future.
robust product	A product that is relatively insensitive to aging, deterioration, component variations, and environmental conditions.
sales cycle	The length from the first contact with a customer until a sale transaction is made.
sales forecast	An estimate of the amount of sales to be achieved under a set of assumed conditions within a specified period of time.
scalability	The extent to which a firm can grow in various dimensions to provide more service.
scale of a firm	The extent of the activity of a firm as described by its size. The scale of a firm's activity can be described by its revenues, units sold, or some other measure of size.
scenario	An imagined sequence of possible events or outcomes, sometimes called a mental model.
scope of a firm	The range of products offered or distribution channels utilized.
S-corporation	A firm that has elected to be taxed as a partnership under the subchapter S provision of the Internal Revenue Code.
seed capital	The first funds used to launch the new firm.
self-organizing organization	Teams of individuals that benefit from the diversity of the individuals and the robustness of their network of interactions.
selling	The transfer of products from one person or entity to another through an exchange mechanism.
six forces model	A model for evaluating the competitive forces in an industry: (1) firm rivalry, (2) threat of entry by new competitors, (3) threat of substitute products, (4) bargaining power of customers, (5) bargaining power of complementors, and (6) bargaining power of suppliers.
small business	A firm with fewer than 50 employees operating as a sole proprietorship, a partnership, or a corporation owned by a few people.
social capital	The accumulation of active connections among people in a network. Social capital refers to the resources available in and through personal and organizational networks.
social entrepreneur	A person or team that acts to form a new venture in response to an opportunity to deliver social benefits while satisfying environmental and economic values.
sole proprietorship	A firm owned by only one person and operated for his or her profit.
sources of innovation	For new ventures, these include universities, research laboratories, and independent inventors.
spin-off unit	An organization that is first established within an existing company and then sent off on its own.
staged financings	The provision of capital to entrepreneurs in multiple installments, with each financing conditional on meeting particular business targets. This helps ensure that the money is not squandered on unprofitable projects.
stock	The owner's shares of the corporation.
stock options	An offer in a plan under which employees can purchase shares of the company at a fixed price. Stock options take on value once the market price of a company's stock exceeds the exercise price. A stock option gives employees the right to buy the company's stock in the future at a preset price.
story	A narrative of factual or imagined events. The story tells the goal, the challenge, and the response of the new firm.
strategic control	The process used by firms to monitor their activities and evaluate the efficiency and performance of these activities and to take corrective action to improve performance, if necessary.
strategic learning	A cyclical process of adaptive learning using four steps: learn, focus, align, and execute.
strategy	A plan or road map of the actions that a firm or organization will take to achieve its mission and goals.
subscription revenue model	A type of business that offers content or a membership to its customers or members and charges a fee permitting access to the information or participation for a certain period of time.
sunk costs	A cost that has already incurred cannot be affected by any present or future decisions. In other words, funds and time invested on a new venture are already spent, regardless of any action taken today or later.
supply-chain management	A firm's processes and those of its suppliers that enable the flow of materials, resources, and information to meet customer demand.
sustainable competitive advantage	A competitive advantage that can be maintained over a period of time.
switching costs	The costs to the customer to switch from the product of an incumbent company to the product of the new entrant.
synergy	The increased effectiveness and achievement produced as a result of the combined action of two or more firms.
talent	The people, often called employees, of an organization.
team	A small number of people with complementary capabilities and skills who are committed to a common objective, goals, and tasks for which they hold themselves mutually accountable.
technology	Devices, artifacts, processes, tools, methods, and materials applied to industrial and commercial purposes.
telework	All kinds of remote work from home, satellite offices, and on the road.
term sheet	A summary of the principal conditions for a proposed investment by a venture capital firm in a company.
theory of a business	How a firm comprehends its total activities, resources, and relationships.
throughput	The amount of units processed within a given time.
throughput efficiency	The ratio of value-adding time and the sum of value-adding time and non-value-adding time. The goal is to reduce non-value-adding time.
tipping point	The moment of critical mass or threshold that results in a jump in adoption of a product or service.
trademark	Any distinctive word, name, symbol, slogan, shape, sound, or logo a firm uses to designate its product.
trade-name franchise	A franchise name that primarily involves a brand name, such as Western Auto or ACE Hardware.
trade secret	An intellectual asset protected by confidentiality, nondisclosure, and assignment of inventions agreements as well as physical barriers such as safes and limited access.
transaction fee revenue model	A type of business that provides a transaction source or activity for a fee.
transnational	A strategy resting on a flow of product offerings created in any one of the countries of operation and transferred between countries.
triple bottom line	The three factors of a product or business: economic, environmental, and social equity.
trust	A firm belief in the reliability or truth of a person or an organization.
uncertain	An outcome resulting from an action in that the outcome is not known or is likely to be variable.
unique selling proposition	A short version of a firm's value proposition often used as a slogan or summary phrase to explain the key benefits of the firm's offering versus that of a key competitor.
usability	A measure of the quality of a user's experience when interacting with a product.
utility patents	Rights of exclusive use issued for the protection of new, useful, nonobvious, and adequately specified processes, machines, and manufacturing processes for a period of 20 years.
valuation rule	The algorithm by which an investor, such as an angel or venture capitalist, assigns a monetary value to a new venture.
value	The worth, importance, or usefulness to the customer. In business terms, value is the worth in monetary terms of the social and economic benefits a customer pays for a product or service.
value chain	The sequence of steps or subprocesses that a firm uses to produce its product or service.
value proposition	Summarizes the values offered to the customer.
value web	Consists of the extended enterprise within a network of interrelated stakeholders that create, sustain, and enhance its value-creating capacity. It is usually based on an Internet infrastructure to manage operations dispersed in many firms.
venture capital	A source of funds for new ventures that is managed by investment professionals on behalf of the investors in the venture capital fund.
venture capitalists	Professional managers of investment funds.
versioning	The creation of multiple versions of a products and selling their modified versions to different market segments at different prices.
vertical integration	The extension of a firm's activities into adjacent stages of productions (i.e., those providing the firm's inputs or those that purchase the firm's outputs).
vertical merger	The merger of two firms at different places on the value chain.
viral marketing	Building knowledge of a product through word of month.
virtual organization	A venture that manages a set of partners and suppliers linked by the Internet, fax, and telephone to provide a source or product.
vision	An informed and forward-looking statement of purpose in response to an opportunity.
working capital	The amount of funds available to support a firm's normal operations, such as unexpected or out-of-the-ordinary, one-time-only expenses. Working capital is a firm's current assets minus its current liabilities.