Question

The purpose of the Reflection Matrix assignment is to comprehend, apply, and synthesize key vocabulary terms and concepts relevant for entrepreneurs. The intent of the assignment is to challenge the student to locate reliable information and apply that knowledge in a practical manner to a business venture that interests the student, and to make relevant connections to course objectives. Your matrix will have three sections. You can write them in paragraph form or create a table in Word: Definitions Article synopses (2) Application and synthesis statement In the first section, briefly define the following terms: debt, equity, convertible debt, preferred equity, term sheet, private placement memorandum, target market, and market segment.

Answer 1

Debt: Debt is basically any form of loan which one party takes from the other and agrees to pay back the amount in future with interest. It can be in a loan, issusing of a bond etc.

Equity: In very simple terms, equity is nothing but investment which one has made throught his / her own money. So when a person in putting his money to set up his business, it is his equity which he is putting in

Convertible Debt: Sometimes, debt issued by the lender has convertibility clause which states that the debt will have an option to get converted into equity in future. That is called convertible debt

Preferred equity :It is a class of equity investors which have higher claims on the assets of the company than common equity holders. When a company go public for raising funds, they are basically diluting its equity and inviting more equity holders. That can be done by common shares or preferred shares. Preferred equity also has dividend paid to them regularly but they do not have any voting rights

Term sheet: It is basically a kind of agreement which sets up the stage for official agreement. It containes all the terms and conditions which needs to be met to proceed further. This is usually non binding and can undergo changes

Private Placement Memorandum :It is an official document which is given to an investor whenever he/she sells something in his/her investment

Target Market: This is basically the group of people towards which my services and offerings are aimed at. Your target market should be such that those consumers will most likely buy from you. For example : If i am McDonals, my target market should be consumers at the age of 8-40. This is because the people in this age are young and independent and have huge spending power.

Market Segment: This is basically a group of consumers which shares one or more characteristics. Marketing people club those customers in one group and formulate the marketing strategy accordingly. Every market segment is unique of its own.