Series A Financing
A significant round of business financing for startup companies that are generating revenue, but not yet profitable.
Fundraising
Series B Financing
A type of financing round for companies who have gone past the startup phase and are expanding market reach.
Term Sheet
A non-binding agreement setting forth the basic terms and conditions under which an investment will be made.
Venture Capital (VC)
A type of private equity, a form of financing that is provided by firms or funds to small, early-stage, emerging firms that are deemed to have high growth potential.
Pitch Deck
A brief presentation used to provide your audience with a quick overview of your business plan, typically used during meetings with potential investors, customers, or partners.
Pre-Money Valuation
The valuation of a company before outside financing and capital injections are added to its balance sheet.
Private Equity
Capital that is not listed on a public exchange, composed of funds and investors that directly invest in private companies.
Round of Financing
A stage in the process of raising capital for a business where investors provide funding in exchange for equity in the company.
Seed Capital
The initial capital used to start a business, often coming from the company founders’ personal assets, friends, or family.
Lead Investor
An investor who arranges funding and leads a group of investors in a deal.
Lean Startup
A methodology for developing businesses and products that aim to shorten product development cycles and rapidly discover if a proposed business model is viable.
Liquidity Event
An event that allows founders and early investors to sell some or all of their shares to the public or another company.
Market Capitalization
The total value of a company’s outstanding shares of stock, calculated by multiplying the share price by the number of shares.
Mezzanine Financing
A hybrid of debt and equity financing that gives the lender the rights to convert to an ownership or equity interest in the company in case of default, after venture capital companies and other senior lenders are paid.
Exit Strategy
A plan devised by a business owner to sell their stake in a company or dispose of it in order to achieve specific objectives.
Grant
A sum of money given by an organization, especially a government, for a particular purpose.
Incubator
An organization designed to help startup companies grow and succeed by providing services like management training or office space.
Initial Public Offering (IPO)
The first time that the stock of a private company is offered to the public.
Convertible Note
A type of short-term debt that converts into equity, usually in conjunction with a future financing round.
Crowdfunding
The practice of funding a project or venture by raising small amounts of money from a large number of people, typically via the internet.
Dilution
The reduction in ownership percentage and value per share when additional shares are issued.
Discount Rate
The interest rate used in discounted cash flow analysis to determine the present value of future cash flows.
Due Diligence
An investigation or audit of a potential investment or product to confirm all facts, such as reviewing all financial records, plus anything else deemed material.
Equity Financing
The process of raising capital through the sale of shares in a company.
Angel Investor
An individual who provides capital to startups in exchange for ownership equity or convertible debt.
Bootstrapping
The act of building a company from the ground up with personal savings and with little outside investment.
Bridge Loan
A short-term loan that provides immediate cash flow while waiting for longer-term financing.
Burn Rate
The rate at which a company consumes its capital or resources before generating positive cash flow.
Cap Table (Capitalization Table)
A spreadsheet or table that shows the ownership stakes in a company, including equity shares, preferred shares, and options.
