Cash flow is the net amount of cash and cash equivalents flowing into and out of a company. Typically a startup can have 4 sources of cash: Equity Funding (allocating shares to investors), Debt (Loans taken from banks or other institutes) Sales (cash from customers, which is the best), Various grants and prizes (winning research grants and or competitions etc.)

A startup that has $100 million in annual recurring revenue.

The transition from a little-known product to the mainstream. If a startup can successfully cross the chasm, they have the opportunity for mainstream success and hypergrowth. The concept stems from the renowned book "Crossing the chasm" by Geoffrey Moore.

Churn rate is the rate at which customers or employees stop doing business with a company or organization. It is typically expressed as a percentage of customers or employees who leave within a given time period.

Click Bait refers to a type of online content, such as headlines or thumbnails, that are designed to attract attention and encourage users to click on the link. The content often exaggerates or misrepresents the actual information or story, leading to disappointment or frustration for the user. Click bait is commonly used to generate website traffic and increase ad revenue.

Usually applying to vesting schedules, Cliff vesting is when an employee or investor becomes fully vested on a specified date rather than becoming partially vested in increasing amounts over an extended period.

The process by which products or services are brought to the market. For example, the process by which mRNA research transitioned into a publicly available COVID-19 vaccine.

A class of stock that represents ownership in a company. It is the basic form of stock issued by any company.

The competitive landscape refers to the list of options a customer could choose rather than your product. The list includes your competitors’ products and other types of customer solutions.

A form of marketing which involves the creation and distribution of content (in any medium) that does not explicitly promote a brand but is intended to generate interest in products or services.

The methodical process of making iterative changes to a website or app to increase the percentage of users who take a desired action.

Put simply, a Convertible Note (CN) is debt finance, a type of convertible security that converts into equity. In terms of using a convertible note for seed funding, the debt automatically converts into shares when Series A closes. Rather than a loan from a creditor accumulating interest, a convertible note from an investor converts into equity based on pre-agreed terms

Crowdfunding is a funding method that involves raising small amounts of money from a large number of individuals, typically via online platforms or websites. This approach allows individuals or organizations to finance various projects, initiatives, or business ventures by tapping into a diverse pool of backers or investors.

A form of crowdsourcing where individuals get equity in return for their funding. Because this is a heavily regulated environment, crowdinvesting is usually done via specialized crowdinvesting platforms.

Customer discovery means identifying who the right customer is for your product while simultaneously finetuning your offering to suit their needs. At this stage you are testing assumptions and hypotheses to validate the customer you’ve identified and their “problem” or need.

A customer success managers (CSM) supports your customers as they transition from sales prospects to active users of your products. They’re focused on customer loyalty and building close long-term client relationships.

A data room (also known as a virtual data room) is an online repository of information that is used for the storing and distribution of documents. Generally used to house documents relating to due diligence in funding rounds.

Debt capital is the capital/finance that a business raises by taking out a loan or other financial security (in this context, debt capital can be an alternative to equity capital).

Startups with a valuation of more than $10 billion. Derived from the famous concept of "unicorn startup".

An event organized by an accelerator, incubator, or VC firm where founders formed by that organization pitch their product to investors.

Trusted product testers who provide critical feedback and help fill in missing gaps in a company's product offering during the early stage of product development.

A set of cultural philosophies, practices, and tools aimed at improving and automating the collaboration and communication between development (Dev) and IT operations (Ops) teams within an organization. The primary goal of DevOps is to streamline and accelerate the software development and delivery process, ensuring that applications and services are delivered more efficiently and with higher quality

Dilution occurs when a startup issues new shares that result in a decrease in existing shareholders' ownership percentage of that company.

"Disruptive innovation” is a term coined by Clayton Christensen, referring to a process in which an underrated product or service starts to become popular enough to replace, or displace, a conventional product or service Those disrupting solutions are often cheaper than the existing solutions and have a more focused and relevant offering to the customer.

A dividend is the distribution of a company's earnings to its shareholders and is determined by the company's board of directors.

Down Round refers to a situation in which a company raises capital by issuing new shares of stock or securities at a lower valuation per share than the valuation established in a previous financing round. In other words, the company's valuation decreases in a down round compared to its earlier funding rounds

The process performed by investors to assess the viability of an investment target, and to ensure that the information provided by the startup is accurate.

This is a popular and widely used method for measuring the financial health of a company and their ability to generate cash.

It is a position in a company (usually a VC firm) that is a short-term role where an experienced entrepreneur is brought in to develop a new business. The firm is often willing to financially support the EIR's business idea.

Enterprise resource planning (ERP) is a platform companies use to manage and integrate the essential parts of their businesses.

Environmental, social and governance (ESG) is a framework used to assess an organization's business practices and performance on various sustainability and ethical issues

Customers who use the startup's product or service before the general public does. These users can offer the startup honest and direct feedback, which can be used to improve the product before expanding to a larger audience. The concept was coined by Rogers in his Diffusion of Innovation (DOI) Theory.

An environment formed by business-oriented people and startups in various stages and organizations for the creation and scaling of new startup companies. Read our book, The Ecosystem, to find out more :)

An elevator pitch is a concise and persuasive speech or presentation that is typically delivered in the time it takes for an elevator ride, which is usually around 30 seconds to 2 minutes. The goal of an elevator pitch is to provide a brief and compelling overview of a product, service, idea, or oneself to capture the listener's attention and generate interest.

The value of shares issued by a startup (or other company). e.g. she owns 63% of the startup's equity.

Equity capital is the capital/finance that a business raises from investors in exchange for equity or stock (in this context, equity capital can be an alternative to debt capital).

Ethereum is a decentralized blockchain platform that allows developers to build and deploy decentralized applications (dApps). It is powered by its own cryptocurrency, ether (ETH).

A person who believes so much in a product or service that they freely try to convince others to use it.

When a founder ends their involvement in the business, usually via a liquidity event (selling their shares to investors or to another company). The main two types of exits are an acquisition and an IPO.

An exit strategy is a Founder's plan to sell their ownership in a company to investors/another company.

The FDA is responsible for protecting the public health by assuring the safety, efficacy, and security of human and veterinary drugs, biological products, medical devices, food supply, cosmetics, and products that emit radiation

The people who fund early-stage startups, often at the pre-seed stage. Also known as the "3F"

A private fund investing on behalf of a single high-net-worth individual, family (Single Family Office), or group of families (Multi Family Office). Family offices may invest in startups or in VC funds, although that's just a small part of their activities.

A finder's fee (also known as "referral income" or "referral fee") is a commission paid to an intermediary or the facilitator of a transaction. The finder's fee is rewarded because the intermediary discovered the deal and brought it to the attention of interested parties. The presumption is that without the intermediary, the parties never would have found the deal, and the facilitator thus warrants compensation.

The process of VC firms investing in the later rounds of companies in their portfolios that they have already invested in in order to avoid dilution.

The person who launches the business, often with co-founders. A grander definition may be "a person or enterprise attempting to find innovative ways to solve an existing problem or fill a gap in the goods or services market".

A contract that a company’s founders enter where they set guidelines for their business relationships. Specifically, founders agreements outline each founder’s rights, roles, responsibilities, compensation, and obligations. Also known as a co-founders agreement, this written legal document sets expectations for each founder so everyone’s on the same page.

A business model and\or a marketing tactic where customers are offered a restricted version of a product or service at no cost. Additional features are available at a cost.

Generally a term used to represent the process of generating capital via exchanging equity for external investment (can also include alternative means of generating capital such as crowdfunding or debt finance).

The General Data Protection Regulation (GDPR) is the toughest privacy and security law in the world. Though it was drafted and passed by the European Union (EU), it imposes obligations onto organizations anywhere, so long as they target or collect data related to people in the EU. The regulation was put into effect on May 25, 2018. The GDPR will levy harsh fines against those who violate its privacy and security standards, with penalties reaching into the tens of millions of euros.