What is a Callable Bond? A callable bond (redeemable bond) is a type of bond that provides the issuer of the bond with the right, but not the obligation, to redeem the bond before its maturity date. The callable bond is a bond with an embedded call option. These bonds generally come with certain restrictions…
What is a Revenue Bond? A revenue bond is a type of municipal bond in which the repayment of the obligation is primarily guaranteed by the operating revenues of an entity. Revenue bonds are primarily utilized by government entities to subsidize infrastructure projects. The most common projects include the construction of airports, roads, bridges, and…
What is a General Obligation (GO) Bond? A general obligation (GO) bond is a type of municipal bond in which the bond repayments (interest and principal) are guaranteed by the total revenue generated by the relevant government entity or agency. In other words, the repayment is guaranteed by both tax revenue and operating revenue generated…
What is Revenue-based Financing? Revenue-based financing, also known as royalty-based financing, is a type of capital-raising method in which investors agree to provide capital to a company in exchange for a certain percentage of the company’s ongoing total gross revenues. It is an alternative investment model to more conventional equity-based investments, such as venture capital…
What is an Initial Coin Offering (ICO)? An initial coin offering (ICO) is a type of capital-raising activity in the cryptocurrency and blockchain environment. The ICO can be viewed as an initial public offering (IPO) that uses cryptocurrencies. However, it is not the most precise comparison, as there are some crucial differences between the two…
What is the Wealth Effect? The wealth effect is a theory centered around the idea that when equity portfolios are consistently earning, the owners feel secure in their wealth and are more likely to spend. Rising equity portfolios are caused by an accelerated increase in stock prices. The perception of greater wealth leads the individual…
What is a Social Impact Bond? A social impact bond (also known as a social benefit good or social bond) is a type of financial security that provides capital to the public sector to fund projects that will create better social outcomes and lead to savings. These bonds are a new development in finance. UK-based…
What is Series C Financing? Series C financing (also known as series C round or series C funding) is one of the stages in the capital-raising process for a startup. The series C round is the fourth stage of startup financing and typically the last stage of venture capital financing. However, some companies opt to…
