Common Startup Terms
There are currently 216 names in this directory
A third-party assessment of the fair market value of your startup's common stock, crucial for setting stock option prices.
A tax election that allows you to pay taxes on the value of restricted stock at the time of purchase, potentially reducing future tax liabilities.
A program providing mentorship, resources, and funding in exchange for equity, designed to fast-track your startup's growth.
An individual meeting specific financial criteria, eligible to invest in your startup.
An experienced individual offering guidance and expertise to help navigate startup challenges.
Amazon Web Services (AWS)
A cloud computing platform by Amazon, commonly used for hosting startup services.
Annual Recurring Revenue (ARR)
Predictable and recurring revenue from subscriptions or contracts annually.
The maximum number of shares your startup can issue, as outlined in corporate documents.
Board of Directors
A group elected to oversee and represent shareholders, providing strategic guidance.
A short-term financing round supporting your startup until the next significant funding round.
Business Plan Competition
A competition where startups present their business plans to win funding or support.
Cap Table (Capitalization Table)
A record of your startup's equity ownership and distribution among investors.
Cash Flow Statement
A financial statement reflecting changes in cash and equivalents due to balance sheet account adjustments.
Discounted Convertible Note
A convertible note issued at a discount to the next funding round's valuation.
Rights allowing majority shareholders to force minority shareholders to join in the sale of a company.
The investigation or research conducted before entering into an agreement or investment.
EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization)
A measure of a company's operating performance.
EIR (Entrepreneur in Residence)
An entrepreneur temporarily working with a venture capital firm or incubator.
A concise and compelling description of your startup, short enough for an elevator ride.
A private wealth management advisory firm serving high-net-worth individuals and families.
Initial Coin Offering (ICO)
A fundraising method involving the creation and sale of cryptocurrency tokens.
A provision giving certain investors priority in receiving proceeds during a liquidity event.
The order in which investors and stakeholders receive proceeds during a liquidity event.
Loss Leader Pricing
Setting the price of one product low to stimulate sales of other, higher-margin products.
LTV (Lifetime Value)
The predicted revenue a customer will generate over their entire relationship with your startup.
OKRs (Objectives and Key Results)
A goal-setting framework used to define and track objectives and their outcomes.
PaaS (Platform as a Service)
A cloud computing service providing a platform for developing, running, and managing applications.
Pay to Play
A provision requiring existing investors to participate in future funding rounds to maintain their ownership.
A lending model where individuals borrow and lend directly without an intermediary.
The right of existing investors to participate in future funding rounds to maintain their ownership percentage.
Alignment between the founder's skills and the challenges your startup aims to solve.
R&D (Research and Development)
The process of investigating and developing new products and technologies.
Representations and Warranties
Statements about your startup's condition and performance made during a deal.
A financing model where repayment is based on a percentage of your startup's revenue.
Right of First Refusal
A contractual right to match an offer before the seller can proceed with a third party.
SaaS (Software as a Service)
A software distribution model providing access to software over the internet.
An individual who identifies and refers potential investment opportunities to a venture capital firm.
SEC (Securities and Exchange Commission)
The U.S. government agency overseeing securities and financial markets.
Series A Crunch
A potential bottleneck faced by startups seeking Series A funding, where the supply of early-stage capital falls short of the demand from companies transitioning from seed funding to more substantial investments.
The second round of funding for startups, typically aimed at scaling operations and expanding market presence after proving the viability of their business model in the Series A stage.
The third round of funding, often directed towards achieving market dominance, global expansion, or preparing for an initial public offering (IPO).
A legally binding contract defining the rights and obligations of shareholders, addressing issues such as decision-making, ownership percentages, and exit strategies.
Investors who not only provide capital but also bring strategic value, industry expertise, and connections to help the startup grow.
Endorsements or support from reputable individuals or organizations, validating the credibility and potential of a startup to attract further investment.
A startup with a primary goal of creating positive social or environmental impact alongside financial profitability.
A controlled and strategic exit for a startup that allows for minimal negative consequences, often involving acquisition or merging with another company.
SPAC (Special Purpose Acquisition Company)
A publicly traded company created for the purpose of acquiring or merging with another company, offering an alternative path to going public.
The combination of technologies, tools, and programming languages used in a startup's product development.
A state in which a startup operates in secrecy to protect its intellectual property and gain a competitive advantage before launching publicly.
A performance-based fee paid to service providers, often consultants or advisors, contingent upon achieving predefined success milestones.
Ownership stake in a company earned through the contribution of time, effort, or expertise instead of monetary investment.
The specific group of customers a startup aims to reach and serve with its products or services.
The individual responsible for the technical aspects of a startup, typically possessing strong programming or engineering skills.
A non-binding agreement outlining the key terms and conditions of an investment, serving as a basis for negotiation before drafting the final legal documents.
The X of Y
A format often used to describe a startup by highlighting its unique combination of attributes or characteristics.
An individual or company recognized as an authority and influential in a particular industry or field.
Evidence of a startup's market success and growth, often measured by user adoption, revenue, or other key performance indicators.
Trough of Sorrow
A challenging phase in a startup's journey characterized by struggles, setbacks, and uncertainty.
Two Pizza Rule
A management principle stating that teams should be small enough that they can be fed with only two pizzas, emphasizing efficiency and effective communication.
UI (User Interface)
The visual elements and design of a software or product that users interact with.
USP (Unique Selling Proposition)
A distinctive feature or benefit that sets a product or service apart from competitors.
UX (User Experience)
The overall experience a user has when interacting with a product, encompassing usability, design, and satisfaction.
The process of confirming the feasibility and potential success of a business idea or product through market testing or user feedback.
Valley of Death
A critical stage in a startup's development where it faces a high risk of failure due to insufficient funding or challenges in scaling.
The estimated monetary worth of a startup, determined through various methods such as market analysis, financial metrics, and comparable company valuations.
The unique value a product or service offers to customers, addressing their needs and differentiating it from competitors.
Venture Capital (VC)
Investment funds provided to startups and small businesses with high growth potential in exchange for equity.
The process by which founders and employees earn ownership of their shares over time, often to incentivize long-term commitment.
A founder with a clear and ambitious long-term vision for the company, driving innovation and strategic direction.
An investor who seeks distressed or struggling companies to invest in, aiming for high returns through restructuring or liquidation.
Financial instruments granting the holder the right to buy a company's stock at a predetermined price within a specified time frame.
A financial model illustrating the distribution of proceeds from a liquidity event, such as an exit or IPO, among stakeholders.
YC (Y Combinator)
A renowned startup accelerator that provides funding, mentorship, and resources to early-stage companies.
A startup focused on creating a sustainable and profitable business, in contrast to the "unicorn" pursuit of rapid and massive valuation.