Traunch

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.

BREAKING DOWN '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. Tranches

    A piece, portion or slice of a deal or structured financing. ...
  2. Alphabet Rounds

    The early rounds of funding for a startup company, which get ...
  3. Venture Capital

    Money provided by investors to startup firms and small businesses ...
  4. Series A Financing

    The first round of financing undergone for a new business venture ...
  5. Series B Financing

    The second round of financing for a business by private equity ...
  6. Venture Capitalist

    An investor who either provides capital to startup ventures or ...
Related Articles
  1. Investing

    What Are Tranches?

    “Tranche” is a French word that refers to a slice.
  2. Investing

    What are Tranches?

    Tranches often describe specific classes of bonds within a security that hold different degrees of risks and maturities.
  3. Managing Wealth

    Series A, B, C Funding: What It All Means and How It Works

    Series A, B and C funding rounds have nothing to do with the alphabet, rather with the development stage of startups raising venture capital.
  4. Markets

    Explaining the Down Round

    A down round is a round of financing that occurs at a lower firm valuation than an earlier round of financing.
  5. Insights

    Menlo Ventures Raises First $250M “Special Opportunity Fund”

    The first of it's kind, special opportunity fund, addresses the recent lack of capital available to high-growth startups in later Series B and C financing.
  6. Managing Wealth

    Fed Raising Rates Affects Startup Funding

    With interest rates having nowhere else to go but up, the Fed’s impending interest rate raise will likely begin to reverse the flow of startup funding.
  7. Managing Wealth

    Seek An Adventure In Venture Capital

    Make a career out of chasing down the "next big thing".
  8. Managing Wealth

    How Social Venture Capital Is Changing the World

    Learn what social venture capital is and the ways in which it differs from traditional venture capital. Identify two leading social venture capital firms.
  9. Managing Wealth

    A Look into the Exciting World of Venture Capital

    We look into the world of venture capital, where deep-pocketed investors gamble on funding the next big startup (or the next big flop).
  10. Entrepreneurship & Small Business

    Declining Venture Capital Offset by Digital Economy

    While the amount of venture capital may be on the decline this new trend certainly does not seem to present a problem for tech startups in today's growing digital economy.
RELATED FAQS
  1. What is a tranche?

    "Tranche" is actually a French word meaning "slice" or "portion". In the world of investing, it is used to describe a security ... Read Answer >>
  2. What type of companies use downround financing?

    Read about the types of companies that are most likely to rely on down round financing, and why existing shareholders don't ... Read Answer >>
  3. What are the differences between downround and upround financing?

    Understand what down rounds and up rounds of financing mean, and learn about the typical progression of a company through ... Read Answer >>
  4. How is venture capital different from other kinds of equity financing?

    Learn how venture capital equity financing differs from other funding options and what companies need to be aware of prior ... Read Answer >>
  5. What are the pros and cons of downround financing?

    Read about the pros and cons of down round financing for a company that has seen its valuation decrease, and see how it impacts ... Read Answer >>
  6. What are some of the disadvantages to taking venture capital?

    Learn how financing a business through venture capital can be a viable source of funding for small businesses but know caveats ... Read Answer >>
Hot Definitions
  1. AAA

    The highest possible rating assigned to the bonds of an issuer by credit rating agencies. An issuer that is rated AAA has ...
  2. GBP

    The abbreviation for the British pound sterling, the official currency of the United Kingdom, the British Overseas Territories ...
  3. Diversification

    A risk management technique that mixes a wide variety of investments within a portfolio. The rationale behind this technique ...
  4. European Union - EU

    A group of European countries that participates in the world economy as one economic unit and operates under one official ...
  5. Sell-Off

    The rapid selling of securities, such as stocks, bonds and commodities. The increase in supply leads to a decline in the ...
  6. Brazil, Russia, India And China - BRIC

    An acronym for the economies of Brazil, Russia, India and China combined. It has been speculated that by 2050 these four ...
Trading Center