Drip Feed

1. The process of investing on an ongoing basis in a small but growing firm over a period of time. Essentially, a drip feed results in a startup company receiving capital contributions as the need for capital arises, rather than getting a lump sum capital contribution at the company's inception.

2. The process of retail investors contributing small amounts of their savings to their investment pool on a periodic basis, such as $200/month, for example.

1. With this type of financing arrangement, startup firms operate with very little surplus capital; their financing needs are only contributed to by venture capitalists as the need for capital arises.

2. Individual investors can benefit from this type of strategy: it reduces the risk of entering positions in overpriced securities, since the investments are spread out. This technique also moderately smooths market fluctuations for the investor, since he or she benefits from dollar-cost averaging (a fixed dollar contribution amount each month, for example, will result in more equity shares being purchased at low market prices than at high prices). Of course, as a trade-off for the safety of this added smoothness, investors sacrifice the potentially higher returns they might have seen if they had simply made a lump sum investment at low market prices.

Investment dictionary. . 2012.

Look at other dictionaries:

  • drip-feed — /drip feed /, n. intravenous feeding. [1905 10, for earlier sense] * * * drip feed «DRIHP FEED», adjective, noun. British. –adj. of or for feeding a medicinal solution intravenously one drop at a time: »A baby was wheeled on a hospital trolley… …   Useful english dictionary

  • drip-feed — /ˈdrɪp fid/ (say drip feed) noun 1. a supply of a liquid delivered drop by drop. 2. a. a tube which supplies blood, plasma, saline or sugar solutions, usually intravenously, to a patient. b. the substance thus administered. 3. a supply of… …   Australian English dictionary

  • drip-feed — drip feeds, drip feeding, drip fed also drip feed VERB If you drip feed money into something, you pay the money a little at a time rather than paying it all at once. [V n into n] ...investors who adopt the sensible policy of drip feeding money… …   English dictionary

  • drip-feed — drip ,feed1 verb transitive 1. ) MEDICAL to give food or medicine to someone who is ill through a special piece of equipment with a tube that goes into their body 2. ) to give something to someone slowly, little by little drip feed drip ,feed 2… …   Usage of the words and phrases in modern English

  • drip-feed — ► VERB ▪ introduce (fluid) drop by drop. ► NOUN (drip feed) ▪ a device for introducing fluid drop by drop …   English terms dictionary

  • drip-feed — /drip feed /, n. intravenous feeding. [1905 10, for earlier sense] * * * …   Universalium

  • drip-feed — I UK / US verb [transitive] Word forms drip feed : present tense I/you/we/they drip feed he/she/it drip feeds present participle drip feeding past tense drip fed past participle drip fed 1) medical to give food or medicine to someone who is ill… …   English dictionary

  • drip feed — noun the administration of a solution (blood or saline or plasma etc.) one drop at a time • Hypernyms: ↑administration, ↑giving medication * * * 1. n. a device for introducing fluid drop by drop into a system, e.g., lubricating oil into an engine …   Useful english dictionary

  • drip feed — noun a device for introducing fluid drop by drop into a system. verb (drip feed) 1》 introduce (fluid) drop by drop.     ↘supply (a patient) with fluid through a drip. 2》 provide gradually and in small amounts: their correspondence is being drip… …   English new terms dictionary

  • drip feed — see drip feed …   English dictionary

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