Glossary (A to Z)
Additive capital – From the term “additionality”, refers to investments or financing that would not have been obtained otherwise from existing markets
Capital – Typically, cash or liquid assets
Early stage business/venture – A business with a product or service in testing, pilot production or that has recently become commercially available
Economic returns – Benefits for the overall economy. For example, this may include metrics such as employment, productivity, etc.
Environmental, social and governance (ESG) – A framework for integrating and assessing environmentally and socially conscious factors in opportunities. Environmental refers to stewardship of the natural environment; Social refers to people and relationships; Governance refers to responsible management.
Equity – Money that is invested by purchasing shares
Diversity, equity and inclusion (DEI) – Policies and practices to make people of various backgrounds feel welcomed and supported to perform to the fullest of their abilities
Due diligence – The exercise of reasonable care before entering into an agreement
Financial returns – Money made or lost on an investment over a period of time
Governance – Structures, systems and practices in place to guide decision-making, delivery of performance and reporting
Impact investments – Investments intended to generate positive and measurable social and environmental returns, as well as financial returns
Impact Measurement and Management (IMM) – The process and framework for measuring how much impact has been made
Investment Policy Statement – A document outlining the goals, strategies, guidelines and restrictions of an investment plan
Later stage business/company – A business or company with a product or service that is commercially available
Net zero future / net zero emissions – A future where greenhouse gas emissions are cut to zero or near zero
Patient capital – Investments or money raised with lenient or longer repayment terms
Profit – Money gained minus costs and expenditures
Risk-adjusted market-rate return – The expected return on an investment based on the commonly available return on the market and accounting for the degree of risk associated with it
Seed stage business/venture – A business with a concept or product in development
Triple bottom line – An accounting framework and business concept that incorporates the three dimensions of performance: people, planet, profit. The theory that organizations should focus as much on environmental and social impacts as they do on profit.
Venture – A new business (startup) that is formed with the expectation of future financial gain
Venture capital – Private equity and financing provided by investors to startups and small- to medium-sized businesses considered to have growth potential
Venture fund – Pooled investment funds that manage the money of investors who provide private capital to startups and small- to medium-sized businesses considered to have growth potential