Traunch

AAA

DEFINITION of 'Traunch'

One of a series of fund allotments earmarked for a specific purpose, such as a financing round in a start-up. Traunches are used by venture capital firms as a means of minimizing risk. Some experts believe "traunch" is a misspelling of "tranche", which means a slice or portion, and is used to describe instruments such as mortgage-backed securities that can be sliced into smaller pieces for sale to investors.

INVESTOPEDIA EXPLAINS 'Traunch'

For example, a development-stage company that has sought venture capital funding may initially receive a $2 million traunch out of a $5 million financing round, with the balance to be received after a month.

RELATED TERMS
  1. Angel Investor

    An investor who provides financial backing for small startups ...
  2. Venture Capital

    Money provided by investors to startup firms and small businesses ...
  3. Vulture Capitalist

    1. A slang word for a venture capitalist who deprives an inventor ...
  4. Down Round

    A round of financing where investors purchase stock from a company ...
  5. Seed Capital

    The initial capital used to start a business. Seed capital often ...
  6. Series A Financing

    The first round of financing undergone for a new business venture ...
Related Articles
  1. How Venture Capitalists Make Investment ...
    Entrepreneurship

    How Venture Capitalists Make Investment ...

  2. Cashing In On The Venture Capital Cycle
    Fundamental Analysis

    Cashing In On The Venture Capital Cycle

  3. When Your Business Needs Money: Angel ...
    Options & Futures

    When Your Business Needs Money: Angel ...

  4. Seek An Adventure In Venture Capital
    Personal Finance

    Seek An Adventure In Venture Capital

comments powered by Disqus
Hot Definitions
  1. Accounts Payable - AP

    An accounting entry that represents an entity's obligation to pay off a short-term debt to its creditors. The accounts payable ...
  2. Ratio Analysis

    Quantitative analysis of information contained in a company’s financial statements. Ratio analysis is based on line items ...
  3. Days Payable Outstanding - DPO

    A company's average payable period. Calculated as: ending accounts payable / (cost of sales/number of days).
  4. Net Sales

    The amount of sales generated by a company after the deduction of returns, allowances for damaged or missing goods and any ...
  5. Over The Counter

    A security traded in some context other than on a formal exchange such as the NYSE, TSX, AMEX, etc. The phrase "over-the-counter" ...
  6. Earnings Before Interest After Taxes - EBIAT

    A financial measure that is an indicator of a company's operating performance. EBIAT, which is equivalent to after-tax EBIT ...
Trading Center