Board of Directors
The term “board of directors” refers to the group of individuals that oversee the strategy and management of an organization. They are typically elected by a vote, but can also be elected as a stipulation of their participation in a funding round. The bylaws of an organization generally outline the number of board members, the election process, and the meeting frequency.
Board rights refer to the set of abilities that each board member of an organization has. These rights can range from calling a board meeting, raising a discussion item and voting on it, to requesting and inspecting all of a company’s financials, and approving future rounds of funding. The full list of board rights are outlined in the bylaws of an organization.
Bootstrapping refers to an operating model where a newly formed company, or startup takes on minimal capital, and instead grows by reinvesting its revenue. Bootstrapped companies often leverage other forms of non-dilutive financing, such as revenue based financing to accelerate their growth and extend their runway. Examples of bootstrapped companies include Dell Computers, Meta (formerly Facebook), Apple, Clorox, Coca Cola, and Hewlett-Packard.
Bottom Up Financial Model
The bottom up financial model, also known as “bottom-up forecasting” is a method of estimating future performance by starting with low-level data, such as a company’s average monthly sales volume, to build “up” to its projected revenue for the upcoming year. Button-up forecasting is the opposite of top-down forecasting which starts with the TAM of a business to estimate its projected revenue for the coming year.
Break Even Point
Break even point refers to the level at which a company’s revenue equals its expenses. When a company’s expenses exceed its revenue, it experiences a loss (the monthly loss is known as its burn rate). Conversely, when a company’s revenue exceeds its expenses, it experiences a profit. Ultimately, the goal of any venture-backed startup is to reach and exceed its break even point.
Bridge Loans in 2023
A bridge loan is a type of short-term loan that is typically taken out for a period of 6 to 12 month for the purpose of “holding-over” a company until they can secure longer-term financing or they can receive significant cash inflows from a signed deal. Bridge loans do not come with extensions, so they are not preferred during periods of economic contraction.
A more founder-friendly alternative to a bridge loan, is revenue based financing, which enables a company to convert their future revenues into upfront capital.