Incubator: An entity designed to nurture business concepts or new technologies to the point that they become attractive to venture capitalists. An incubator typically provides both physical space and some or all of the services-legal, managerial, technical-needed for a business concept to be developed. Incubators often are backed by venture firms, which use them to generate early-stage investment opportunities.

Initial public offering (IPO): When a privately held company-owned, for example, by its founders and its venture capital investors-offers shares of its stock to the public.

Lead investor: The firm or individual that organizes a round of financing, and usually contributes the largest amount of capital to the deal.