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Terminology

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  • Terminology
  • 1. Venture Capital (VC)

    A form of private equity financing provided to startups and early-stage companies by investors in exchange for ownership equity.

  • 2. Angel Investor

    An individual who provides capital and support to startups and small businesses in their early stages in exchange for ownership equity or convertible debt.

  • 3. Seed Funding

    The initial capital provided to a startup to help it get off the ground and develop a basic product or service.

  • 4. Series A, B, C Funding

    Different rounds of financing that a startup goes through as it grows and scales, with each subsequent round involving larger investments.

  • 5. Due Diligence

    The process of investigating and assessing the potential risks and opportunities of investing in a company before making a final decision.

  • 6. Term Sheet

    A non-binding agreement that outlines the basic terms and conditions of an investment, including valuation, ownership percentage, and rights of investors.

  • 7. Valuation

    The process of determining the worth or value of a startup or company, often based on its assets, revenue, growth potential, and comparable industry data.

  • 8. Exit Strategy

    A plan outlining how investors will realize a return on their investment, usually through an initial public offering (IPO) or acquisition by another company.

  • 9. IPO (Initial Public Offering)

    The first time a company's stock becomes available to the public for trading on a stock exchange.

  • 10. Convertible Note

    A type of debt instrument that can be converted into equity at a later stage, typically during the next funding round.

  • 11. Burn Rate

    The rate at which a startup or company is spending its capital or cash reserves to cover expenses, usually measured on a monthly basis.

  • 12. Runway

    The amount of time a startup can operate before running out of funds, based on its current burn rate and available capital.

  • 13. Pitch Deck

    A presentation used by entrepreneurs to pitch their startup or business idea to potential investors.

  • 14. Cap Table

    Short for "capitalization table," it shows the ownership stakes of investors, founders, and other shareholders in a company.

  • 15. Vesting

    A process that governs the distribution of equity to founders and employees over a specific period to incentivize them to stay with the company.

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