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You must be an accredited investor in order to be eligible to invest in BIP Ventures Evergreen BDC
Definition of an Accredited Investor
An individual must meet one of a number of criteria to be accredited.
Source: https://www.sec.gov/education/capitalraising/building-blocks/accredited-investor
This venture capital glossary provides clear definitions of essential terms used by investors, founders, and advisors. Each entry explains what the term means and why it matters in venture funding, company building, and wealth management. Use this glossary to understand and speak the language of private markets.
40-Act Funds are investment vehicles authorized by the Investment Company Act of 1940, including open-end mutual funds, exchange-traded funds, closed-end funds, and unit investment trusts.
An accredited investor is an individual or entity that meets certain financial criteria defined by the SEC, including i) having a gross income of $200,000, or joint income with a spouse or partner of $300,000 or more, in each of the two most recent years, or ii) having $1,000,000 in liquid net worth, not including equity in the primary residence. Status as an accredited investor allows these individuals to invest in private market securities not registered with financial authorities.
Alpha is the return generated above what the market or a benchmark would normally deliver. In private markets, it reflects the manager’s skill—finding strong companies, improving how they operate, and exiting at the right time. It’s a measure of how much value comes from active management, not just overall market trends.
Alternative investments ("alternatives") are financial assets that fall outside traditional categories like stocks, bonds, or cash, including assets such as venture capital, private equity, private credit, hedgefunds, real estate, commodities, and infrastructure, designed to provide diversification and potentially higher returns independent of public markets.
An affluent individual who provides initial capital for startups, usually in exchange for convertible debt or ownership equity.
An asset class is a group of investments (e.g., private equity or private credit) that exhibit similar characteristics and are subject to the same regulations.
The total market value of the investments that a firm manages on behalf of its clients.
A Business Development Company (BDC) is a type of investment company that provides capital to small and mid-sized businesses, often in the form of private debt or private equity. BDCs give individual investors access to private market-like opportunities while delivering potential income through dividends.They play a vital role in funding businesses that may not have access to traditional capital markets.
A buyout fund is a type of private equity fund that acquires a controlling interest, often a majority stake, in established companies. These funds use a mix of equity and debt financing to restructure, expand, or improve operations, with the goal of increasing value before an eventual sale or exit.
A capital call is a formal request from a private fund to its investors to provide a portion of their committed capital. These requests are made periodically as investments or expenses arise. Rather than collecting all capital upfront, this staged approach ensures that money is drawn down only when needed, allowing investors to keep funds liquid until deployment.
Capital structure refers to the mix of debt and equity a company uses to finance its growth and operations. It defines how financial risk and ownership are distributed between creditors and shareholders. A balanced capital structure can lower a company’s cost of capital and increase resilience in varying economic conditions.
Carried interest is a performance-based fee paid to a fund’s general partner or investment manager. It represents a share of the profits, typically earned after limited partners have received a minimum return (preferred return or hurdle rate). Carried interest aligns the interests of managers with those of investors by rewarding strong fund performance.
A closed-end fund is a pooled investment vehicle created under the Investment Company Act of 1940. It raises a fixed amount of capital at inception and issues a set number of shares. These shares can be bought and sold on public exchanges, providing liquidity to investors. Some closed-end funds may also offer limited redemption or capital acceptance opportunities at periodic intervals.
The commitment period is the time frame during which investors are obligated to provide their pledged capital to a private fund. During this period, managers actively deploy capital into new investments. Once it ends, the fund typically shifts from making new investments to managing, supporting, and exiting its existing portfolio.
Compounding is the process in which an asset's earnings, from either capital gains or interest, are reinvested to generate additional earnings over time. This effect can significantly increase investment returns, especially over longer periods.
Correlation is a statistical measure of the relationship between two sets of data. In the case of asset prices, movement toward one another is positive correlation. Movement away from one another is a negative (or inverse) correlation.
A Credit or Debt BDC (Business Development Company) is an investment company that primarily lends to small and medium-sized businesses, providing them with capital while generating interest income for investors. These vehicles sit higher in the capital structure and often have collateral backing, which provides priority in case of liquidation. While credit/debt BDCs generally offer less potential for capital appreciation than equity investments, they can generate consistent income through interest payments on debt securities.
DPI is a measure used in private equity to evaluate the cumulative distributions received by investors relative to the amount of capital they have invested. It is a key metric for assessing realized returns.
Diversification is a strategy of balancing a variety of investments within a portfolio to mitigate risk. A diversified portfolio contains a mix of asset types and investment vehicles to mitigate exposure to any single asset or risk.
Dividend (or cash yield) rate expresses the income and capital distributed to investors as a percentage of the total investment capitalization.
A drawdown occurs when a private fund requests a portion of an investor’s committed capital. Rather than requiring the full commitment upfront, funds call capital in tranches as investment opportunities or expenses arise. This process allows investors to keep capital elsewhere until it is needed.
The process of investigating and evaluating a potential investment, including financial, legal, and operational assessments.
The Efficient Frontier is a concept in modern portfolio theory representing a set of optimal portfolios that offer the highest expected return for a given level of risk or the lowest risk for a given level of expected return.
The endowment model is an investment strategy used by institutions to achieve long-term growth and sustainability through diversified, actively managed portfolios that include a mix of traditional and alternative assets.
An Equity BDC (Business Development Company) primarily invests in equity securities of small- to mid-sized businesses. These vehicles appeal to investors who seek long-term capital appreciation and are comfortable with higher risk and potential capital loss in exchange for equity upside.
An Evergreen Fund is an investment vehicle with no fixed end date, allowing continuous fundraising, investment activity, and redemptions. This flexible structure supports long-term strategies and makes it possible to reinvest proceeds or provide follow-on funding for portfolio companies that prove successful over time.
An exit strategy is a plan for how an investor will realize returns and convert an investment into cash. Common liquidity events include an initial public offering (IPO), a sale to a strategic buyer, or a merger. Exit strategies are central to private market investing because they determine how and when investors capture value.
A private wealth management advisory firm that serves very wealthy families and ultra-high-net-worth individuals. They provide customized investment management services including trusts, estate planning, and other financial services.
Form 1099 is a collection of forms used to report payments that typically aren't from an employer. 1099 forms can report different types of incomes. These can include realized gains and income from investments, payments to independent contractors, gambling winnings, rents, royalties, and more.
A Fund of Funds (FoF) is an investment strategy where a fund invests in a portfolio of other investment funds rather than investing directly in securities or companies.
A General Partner (GP) is a partner in a private equity firm who is responsible for managing the fund and making investment decisions.
A Growth Equity Fund provides capital to later-stage businesses that have established products, revenue, and a path to expansion. Unlike venture capital, which funds early-stage startups, growth equity supports companies scaling operations, entering new markets, or pursuing acquisitions. Investors gain exposure to businesses with proven models but still meaningful growth potential.
A high net worth individual (HNWI) is a person with liquid assets above a certain threshold, typically $1 million or more.
The hurdle rate is the minimum annualized return a fund must achieve before its general partner is entitled to carried interest. This benchmark protects limited partners by ensuring that managers participate in profits only after delivering a base level of performance.
Internal Rate of Return (IRR) is a key performance metric in private markets that calculates the annualized rate of return for an investment, factoring in both the timing and compounding of cash flows. Unlike ARR (Annual Rate of Return), which provides a simple average, IRR accounts for when cashflows occur, making it a more accurate measure of performance for funds with irregular distributions.
An interval fund is a type of investment fund that acts like a hybrid between open-end and closed-end funds. Interval funds offer scheduled redemption opportunities, usually quarterly or semi-annually, at a percentage of the fund's net asset value (NAV). The structure provides shareholders with limited liquidity because they can withdraw a portion of their investment at regularly scheduled intervals while maintaining a long-term capital commitment.
The J-Curve describes the typical return pattern of private equity and venture capital funds. In the early years, returns often dip into negative territory due to fees, expenses, and investments being held at cost. As portfolio companies mature and begin to increase in value, performance rises, creating the J-shaped curve. This curve reflects both the upfront costs of building a portfolio and the eventual appreciation of the companies once growth strategies take effect.
K-1 is a U.S. tax return schedule used to report a private market investor’s share of the profits and losses from a business partnership. They are necessary because many private market funds (i.e., venture capital and private equity) are structured as pass-through entities. Investors use the information on the K-1 to file their personal income tax returns.
A Limited Partner (LP) is an investor in a private equity fund who provides capital but has limited liability and is not involved in day-to-day management.
Multiple on Invested Capital (MOIC) is a performance metric that shows how much total value an investment has generated compared to the capital invested.For example, a 2x MOIC means the investment has returned twice the original capital. Unlike IRR, which considers the timing and compounding of cash flows, MOIC provides a straightforward snapshot of multiple returns without regard to time.
Permanent capital is investment capital that is committed for an indefinite period, allowing for long-term investments without the pressure of returning capital to investors by a specific date.
A preferred return (or “pref”) is the minimum annualized return that a fund must provide to limited partners before the general partner can share in profits through carried interest. It ensures that investors receive priority in returns, aligning incentives between investors and managers.
Private credit/private debt involves investments in non-listed debt instruments (e.g., loans, bonds, and notes issued by private companies). Private credit/private debt can offer the potential for higher returns, increased control over terms, and reduced liquidity compared to public market debt instruments.
Private equity (PE) funds focus on providing capital to later-stage, established, or growth-stage companies. The most common form is buyout funds, which acquire controlling stakes to drive operational improvements and long-term value creation. Unlike venture capital, which finances early-stage startups, private equity emphasizes scaling and restructuring mature businesses. For investors, PE offers potential for strong returns, diversification, and influence over portfolio companies, though it requires long investment horizons and offers limited liquidity.
Qualified clients (QCs) are individuals or entities that meet specific financial criteria as defined by regulatory standards (i.e., individual net worth exceeding $2.2 million, excluding the primary residence), allowing them to participate in private market transactions.
Qualified purchasers (QPs) are individuals or family-owned businesses with $5 million or more in investments, or that invest $25 million or more for others (e.g., an investment manager).
Real assets are alternative investment offerings that typically are tangible and derive value from their substance and physical presence (e.g., real estate, commodities).
RIAs are investment and wealth advisors who are registered with the SEC or state regulators to advise clients – typically HNWI and family offices – about investment, portfolio management, and wealth strategies.
A Regulated Investment Company (RIC) is any investment entity (e.g., mutual funds, closed-end funds, open-end funds) that files a registration statement with the Commission and meets all requirements of the 1940 Act. An investment entity elects to be treated as a RIC to relieve the entity from corporate-level income taxes. RICs meet specific source-of-income and asset diversification requirements and make timely income distributions earned from investments as dividends.
The Russell 2000 is an index that measures the performance of approximately 2,000 of the smallest publicly traded companies in the Russell 3000 Index – the largest 3,000 publicly traded companies in the U.S. (approximately 98% of the investable U.S. equity market). Startups in the Russell 2000 represent a broad spectrum of the U.S. small-cap equity market.
In the private market context, a secondary marketplace is the context in which investors buy and/or sell limited partnership interests in existing private equity funds.
A secondary transaction is the sale or purchase of an investor’s existing interest in a private company or fund. Unlike primary investments, which provide new capital to a business, secondaries transfer ownership between investors. They create liquidity in otherwise illiquid markets and allow investors to enter or exit positions outside of traditional exit events.
Seed capital is the initial funding used to start a business, covering early expenses such as market research and product development.
A Special Purpose Vehicle (SPV) is a legal entity formed to isolate risk and hold a single investment or group of investments. SPVs are commonly used to pool capital from multiple investors into one company or deal. They allow investors to participate in specific opportunities without committing to an entire fund, while keeping the associated risk contained within the entity.
Standard deviation is a statistical measure of the variation from the average (mean) in a set of data, commonly used to assess the volatility of investment returns over a given amount of time.
Subscription documents are the legal agreements that investors complete to commit capital to a private fund. They include critical information such as the investor’s financial status, accreditation, and commitment amount. By signing, investors acknowledge their understanding of the fund’s terms, obligations, and risks, making these documents essential to the fund formation process.
A non-binding agreement outlining the basic terms and conditions under which an investment will be made.
Total Value to Paid-In Capital (TVPI) is a ratio that measures the total value of an investment fund relative to the capital invested by limited partners. It includes both realized returns (distributions) and unrealized returns (remaining value of the fund).
A tranche is a portion or slice of a larger investment, financing round, or security that is structured separately from the whole. In private markets, capital may be released in tranches as companies meet set milestones. Each tranche can carry different terms, risk levels, or repayment priorities, giving investors and managers flexibility in how capital is deployed and managed.
The process of determining the current worth of an asset or a company. Valuation is often used in the context of investment decisions.
Venture capital is a type of private market equity financing where investors provide funding to early-stage startups that demonstrate potential for high growth. For entrepreneurs, VC offers capital and strategic support to help their business scale. For investors, this type of alternative fund can generate significant returns over time through liquidity structures and exit events that happen once the companies have matured and increased in value, typically within seven to ten years of the initial investment.