Academy / Glossary-S-U / Article

U

Eric Fung Admin

Unbundling

Unbundling refers to the process of separating a product or service into individual components, each sold separately. This approach allows customers to purchase only what they need rather than buying a bundled package.

For example, an airline might unbundle its services by offering seat selection, checked baggage, and in-flight meals as optional add-ons, rather than including them in the ticket price.

Uncommon Stock

Uncommon Stock, also known as Class B shares, refers to a class of stock that typically has fewer voting rights than common stock. It is often issued to provide different voting power and dividend rights among shareholders.

For example, a company might issue uncommon stock to founders and executives, giving them greater control over company decisions while offering common stock to public investors.

Underwriter

An Underwriter is a financial specialist who assesses the risk of insuring, lending, or investing in a particular entity. In the context of securities, underwriters help companies issue new stocks or bonds to the public and assume the risk of selling them.

For example, an investment bank acting as an underwriter might guarantee the sale of a new stock issue by buying the shares from the company and reselling them to the public.

Underwriting

Underwriting is the process by which an underwriter evaluates and assumes the risk of insuring, lending, or investing in a particular asset or entity. It is crucial in determining the terms and pricing of the risk.

For example, in an IPO, the underwriting process involves the investment bank assessing the company’s value and setting the initial stock price.

Unicorn

A Unicorn is a privately held startup company valued at over $1 billion. The term highlights the rarity and success of such high-value startups.

For example, a tech startup that has reached a valuation of $1.5 billion through multiple funding rounds is considered a unicorn.

Unlevered

Unlevered refers to a company or investment that does not use borrowed money (debt) to finance its operations or growth. It indicates a purely equity-financed entity.

For example, an unlevered company relies solely on equity capital from shareholders, avoiding the risks associated with debt financing.

Unlisted

Unlisted refers to securities that are not listed on a formal stock exchange. These securities are typically traded over-the-counter (OTC) and are subject to fewer regulations.

For example, shares of a private company that are bought and sold through private transactions are considered unlisted.

Unpaid Capital

Unpaid Capital is the portion of the issued share capital of a company that has been subscribed for by shareholders but has not yet been paid. It represents a future obligation of the shareholders to the company.

For example, if a shareholder agrees to purchase shares for $100,000 but has only paid $50,000 so far, the unpaid capital is $50,000.

Unrealized Gain/Loss

Unrealized Gain/Loss refers to the increase or decrease in the value of an investment that has not yet been sold. It reflects the paper profit or loss on an asset that is still held.

For example, if an investor holds stocks that have increased in value but has not sold them, the difference between the purchase price and the current market price is an unrealized gain.

Unrestricted Stock

Unrestricted Stock is stock that can be freely traded without any restrictions. It contrasts with restricted stock, which may be subject to limitations on transfer or sale.

For example, shares of a public company that are freely tradable on the stock exchange are considered unrestricted stock.

Upselling

Upselling is a sales technique where a seller encourages a customer to purchase a more expensive item, an upgrade, or an add-on to generate more revenue. It focuses on increasing the customer’s spending.

For example, a fast-food restaurant might upsell by suggesting a customer add fries and a drink to their meal.

Upside Potential

Upside Potential refers to the possibility that an investment’s value will increase, leading to a higher return. It is an important consideration for investors looking for growth opportunities.

For example, an investor might be attracted to a tech startup with significant upside potential due to its innovative products and market demand.

Unilateral Contract

A Unilateral Contract is a contract in which only one party makes a promise or undertakes a performance obligation. The contract is fulfilled when the other party performs the specified action.

For example, a reward offer for a lost pet is a unilateral contract, as the owner promises to pay a reward if someone finds and returns the pet.

Unmet Need

Unmet Need refers to a gap in the market where customer demand is not being adequately addressed by existing products or services. Identifying unmet needs can lead to business opportunities.

For example, a company might identify an unmet need for affordable, high-quality childcare services in a community and develop a business to fill that gap.

Unrealized Gain/Loss

Unrealized Gain/Loss refers to the increase or decrease in the value of an investment that has not yet been sold. It reflects the paper profit or loss on an asset that is still held.

For example, if an investor holds stocks that have increased in value but has not sold them, the difference between the purchase price and the current market price is an unrealized gain.

Upfront Cost

Upfront Cost is the initial expense required to acquire an asset or start a project. It includes all immediate costs associated with the purchase or implementation.

For example, the upfront cost of purchasing new software for a business might include the purchase price, installation fees, and initial training expenses.

Up Round

An Up Round is a financing round in which a startup raises capital at a higher valuation than its previous funding round. It indicates the company’s growth and increased value.

For example, if a startup raised funds at a $10 million valuation in its last round and secures new funding at a $15 million valuation, it has completed an up round.

Usage-Based Pricing

Usage-Based Pricing is a pricing strategy where customers are charged based on their usage of a product or service. It aligns costs with consumption, making it flexible for users.

For example, a cloud storage provider might use usage-based pricing, charging customers based on the amount of storage they use each month.

Utility Patent

A Utility Patent is a type of patent granted for the invention of a new and useful process, machine, manufacture, or composition of matter. It protects the inventor’s rights to the invention for a specified period, typically 20 years.

For example, a company that develops a new type of medical device might apply for a utility patent to protect its invention from being copied by competitors.

Unilateral Contract

A Unilateral Contract is a contract in which only one party makes a promise or undertakes a performance obligation. The contract is fulfilled when the other party performs the specified action.

For example, a reward offer for a lost pet is a unilateral contract, as the owner promises to pay a reward if someone finds and returns the pet.

User Acquisition

User Acquisition is the process of attracting and acquiring new users for a product or service through marketing and promotional efforts. It is a critical aspect of growth for businesses, particularly in the digital and tech sectors.

For example, a mobile app developer might use social media advertising and referral programs to drive user acquisition and increase downloads.

User Engagement

User Engagement refers to the level of interaction and involvement that users have with a product, service, or content. High user engagement often leads to greater customer satisfaction, loyalty, and retention.

For example, a social media platform might measure user engagement by tracking metrics such as time spent on the site, likes, shares, and comments.

User Experience (UX)

User Experience (UX) encompasses all aspects of a user’s interaction with a product, service, or system. It focuses on designing products that are easy to use, efficient, and enjoyable for the user.

For example, a website with a well-designed user interface, easy navigation, and fast load times provides a positive user experience.

Use of Funds

Use of Funds refers to the specific ways in which a company plans to allocate the capital it raises. It outlines the intended expenditures for the raised capital, such as product development, marketing, or expansion.

For example, a startup might detail its use of funds in its pitch to investors, explaining how the capital will be used to hire new staff, develop new features, and market its product.

Utility Patent

A Utility Patent is a type of patent granted for the invention of a new and useful process, machine, manufacture, or composition of matter. It protects the inventor’s rights to the invention for a specified period, typically 20 years.

For example, a company that develops a new type of medical device might apply for a utility patent to protect its invention from being copied by competitors.

Unsecured Loan

An Unsecured Loan is a loan that is not backed by collateral. The lender relies on the borrower’s creditworthiness and ability to repay the debt. Unsecured loans typically carry higher interest rates due to the increased risk.

For example, a personal loan from a bank that does not require any assets as collateral is an unsecured loan.

Uniform Commercial Code (UCC)

The Uniform Commercial Code (UCC) is a set of laws governing commercial transactions in the United States. It standardizes laws across states to facilitate interstate commerce, covering areas such as sales, leases, negotiable instruments, and secured transactions.

For example, businesses rely on UCC regulations to conduct transactions with confidence, knowing that consistent legal standards apply across different states.

Underwater

Underwater refers to a situation where an asset’s market value is less than its purchase price or the outstanding balance on a loan secured by the asset. It is commonly used to describe stock options or real estate.

For example, an employee’s stock options might be underwater if the exercise price is higher than the current market price of the shares.

Unmet Need

Unmet Need refers to a gap in the market where customer demand is not being adequately addressed by existing products or services. Identifying unmet needs can lead to business opportunities.

For example, a company might identify an unmet need for affordable, high-quality childcare services in a community and develop a business to fill that gap.

Unrealized Gain/Loss

Unrealized Gain/Loss refers to the increase or decrease in the value of an investment that has not yet been sold. It reflects the paper profit or loss on an asset that is still held.

For example, if an investor holds stocks that have increased in value but has not sold them, the difference between the purchase price and the current market price is an unrealized gain.

Unrestricted Stock

Unrestricted Stock is stock that can be freely traded without any restrictions. It contrasts with restricted stock, which may be subject to limitations on transfer or sale.

For example, shares of a public company that are freely tradable on the stock exchange are considered unrestricted stock.

Upselling

Upselling is a sales technique where a seller encourages a customer to purchase a more expensive item, an upgrade, or an add-on to generate more revenue. It focuses on increasing the customer’s spending.

For example, a fast-food restaurant might upsell by suggesting a customer add fries and a drink to their meal.

Upside Potential

Upside Potential refers to the possibility that an investment’s value will increase, leading to a higher return. It is an important consideration for investors looking for growth opportunities.

For example, an investor might be attracted to a tech startup with significant upside potential due to its innovative products and market demand.

Unilateral Contract

A Unilateral Contract is a contract in which only one party makes a promise or undertakes a performance obligation. The contract is fulfilled when the other party performs the specified action.

For example, a reward offer for a lost pet is a unilateral contract, as the owner promises to pay a reward if someone finds and returns the pet.

User Acquisition

User Acquisition is the process of attracting and acquiring new users for a product or service through marketing and promotional efforts. It is a critical aspect of growth for businesses, particularly in the digital and tech sectors.

For example, a mobile app developer might use social media advertising and referral programs to drive user acquisition and increase downloads.

User Engagement

User Engagement refers to the level of interaction and involvement that users have with a product, service, or content. High user engagement often leads to greater customer satisfaction, loyalty, and retention.

For example, a social media platform might measure user engagement by tracking metrics such as time spent on the site, likes, shares, and comments.

User Experience (UX)

User Experience (UX) encompasses all aspects of a user’s interaction with a product, service, or system. It focuses on designing products that are easy to use, efficient, and enjoyable for the user.

For example, a website with a well-designed user interface, easy navigation, and fast load times provides a positive user experience.

Use of Funds

Use of Funds refers to the specific ways in which a company plans to allocate the capital it raises. It outlines the intended expenditures for the raised capital, such as product development, marketing, or expansion.

For example, a startup might detail its use of funds in its pitch to investors, explaining how the capital will be used to hire new staff, develop new features, and market its product.

Utility Patent

A Utility Patent is a type of patent granted for the invention of a new and useful process, machine, manufacture, or composition of matter. It protects the inventor’s rights to the invention for a specified period, typically 20 years.

For example, a company that develops a new type of medical device might apply for a utility patent to protect its invention from being copied by competitors.

Unsecured Loan

An Unsecured Loan is a loan that is not backed by collateral. The lender relies on the borrower’s creditworthiness and ability to repay the debt. Unsecured loans typically carry higher interest rates due to the increased risk.

For example, a personal loan from a bank that does not require any assets as collateral is an unsecured loan.

Uniform Commercial Code (UCC)

The Uniform Commercial Code (UCC) is a set of laws governing commercial transactions in the United States. It standardizes laws across states to facilitate interstate commerce, covering areas such as sales, leases, negotiable instruments, and secured transactions.

For example, businesses rely on UCC regulations to conduct transactions with confidence, knowing that consistent legal standards apply across different states.

Unit Economics

Unit Economics refers to the direct revenues and costs associated with a particular business model, calculated on a per-unit basis. It helps businesses understand the profitability of each unit sold or each customer acquired.

For example, a subscription service might analyze its unit economics by comparing the customer acquisition cost to the lifetime value of each subscriber.

Usage-Based Pricing

Usage-Based Pricing is a pricing strategy where customers are charged based on their usage of a product or service. It aligns costs with consumption, making it flexible for users.

For example, a cloud storage provider might use usage-based pricing, charging customers based on the amount of storage they use each month.

Unrealized Gain/Loss

Unrealized Gain/Loss refers to the increase or decrease in the value of an investment that has not yet been sold. It reflects the paper profit or loss on an asset that is still held.

For example, if an investor holds stocks that have increased in value but has not sold them, the difference between the purchase price and the current market price is an unrealized gain.

Upfront Cost

Upfront Cost is the initial expense required to acquire an asset or start a project. It includes all immediate costs associated with the purchase or implementation.

For example, the upfront cost of purchasing new software for a business might include the purchase price, installation fees, and initial training expenses.

Up Round

An Up Round is a financing round in which a startup raises capital at a higher valuation than its previous funding round. It indicates the company’s growth and increased value.

For example, if a startup raised funds at a $10 million valuation in its last round and secures new funding at a $15 million valuation, it has completed an up round.

Use of Funds

Use of Funds refers to the specific ways in which a company plans to allocate the capital it raises. It outlines the intended expenditures for the raised capital, such as product development, marketing, or expansion.

For example, a startup might detail its use of funds in its pitch to investors, explaining how the capital will be used to hire new staff, develop new features, and market its product.

Unlisted

Unlisted refers to securities that are not listed on a formal stock exchange. These securities are typically traded over-the-counter (OTC) and are subject to fewer regulations.

For example, shares of a private company that are bought and sold through private transactions are considered unlisted.