Startup Fundraising Glossary

Navigate the world of startup financing with confidence

Explore a glossary of essential terms in startups, startup fundraising, bootstrapping and entrepreneurship. Decode the terminology and jargon with ease.

  • Convertible Equity

    Convertible Equity is an investment vehicle often used in seed rounds where the investment converts into equity at a later financing round.

  • Convertible Note

    Convertible Note is a short-term debt that converts into equity, typically in conjunction with a future financing round.

  • Convertible Note Cap

    Convertible Note Cap is a provision in a convertible note that sets a maximum valuation at which the note will convert into equity, protecting investors from dilution in subsequent financing rounds.

  • Core Competencies

    Core Competencies are the main strengths or strategic advantages of a business, the combination of pooled knowledge and technical capacities that allow a business to be competitive in the marketplace.

  • Corporate Venture Capital (CVC)

    Corporate Venture Capital (CVC) is a subsidiary of a large corporation which makes venture capital investments.

  • Covenant

    Covenant in finance terms is an agreement or promise to do or not to do something, often included in lending agreements specifying conditions the borrower must adhere to.

  • Cross-Promotion

    Cross-Promotion is a marketing technique where two or more companies promote each other`s products or services, aiming to leverage their respective customer bases.

  • Crowd Equity

    Crowd Equity is a form of crowdfunding that lets investors buy equity stakes in startups online.

  • Crowd Lending

    Crowd Lending, also known as peer-to-peer lending, involves borrowing money directly from a large number of people without the intermediation of a traditional financial institution.

  • Crowdfunding

    Crowdfunding is the practice of funding a project or venture by raising small amounts of money from a large number of people, typically via the Internet.

  • Crowdsourcing

    Crowdsourcing is the practice of obtaining information, ideas, or content by soliciting contributions from a large group of people, especially from an online community, rather than from traditional employees or suppliers.

  • Customer Acquisition Cost (CAC)

    Customer Acquisition Cost (CAC) is the cost associated directly with acquiring a new customer, a crucial metric for startups to monitor.

  • Customer Development

    Customer Development is a four-step framework for discovering and validating the right market for your idea, building the right product features that solve customers’ problems, and testing the correct methods for acquiring and converting customers.

  • Customer Lifetime Value (CLV)

    Customer Lifetime Value (CLV) is a prediction of the net profit attributed to the entire future relationship with a customer, important for assessing how much a company should spend to acquire a customer.

  • Customer Retention Rate

    Customer Retention Rate is a metric that measures how well a company keeps its customers over a period. High retention rates are indicative of product or service value, customer satisfaction, and loyalty.

  • Customer Segmentation

    Customer Segmentation is the practice of dividing a customer base into groups of individuals that are similar in specific ways relevant to marketing, such as age, gender, interests, and spending habits.

  • Cybersecurity Measures

    Cybersecurity Measures are protocols and practices put in place by a startup to protect its systems, networks, devices, and data from cyber attacks and unauthorized access.

  • Data Monetization

    Data Monetization is the process of using data to generate measurable economic benefits, including through direct selling, enhancing products, or improving customer experience.

  • Data Privacy Compliance

    Data Privacy Compliance refers to adhering to laws and regulations that protect individuals` personal information, critical for startups collecting or processing user data.

  • Data Room

    Data Room is a secure online or physical space where documents and files are stored and shared, often used during financial transactions or legal proceedings for due diligence.

  • Data-driven Decision Making

    Data-driven Decision Making involves making decisions based on data analysis and interpretation, rather than intuition or observation alone, crucial for strategic planning in startups.

  • Deal Closure

    Deal Closure is the finalization of a fundraising or investment transaction, marking the end of negotiations and the start of partnership or equity exchange.

  • Deal Execution

    Deal Execution refers to the process of completing an investment transaction, from negotiation and due diligence to the final signing and exchange of funds.

  • Deal Flow

    Deal Flow is the rate at which investment offers or business proposals are received by investors or venture capital firms.

  • Deal Room

    Deal Room is a secure online space where confidential documents are stored and shared during financial transactions or negotiations, facilitating the due diligence process.

  • Decacorn

    Decacorn refers to a startup company that has reached a valuation of over $10 billion, a significant milestone in the startup world.

  • Dedicated Fund

    Dedicated Fund is a fund established for a specific purpose or to serve a particular sector, often with a focus on startups in specific stages or industries.

  • Dedicated Team Model

    Dedicated Team Model is a business engagement model where a client and service provider agree to work together on a project with a team dedicated solely to that project.

  • Default

    Default is the failure to repay a debt including interest or principal on a loan or security when due.

  • Delisting

    Delisting is the removal of a listed security from a stock exchange, making it no longer publicly traded.

  • Demand Generation

    Demand Generation is a holistic marketing and sales strategy aimed at generating awareness and interest in a company`s products or services.

  • Design Patent

    Design Patent protects the unique visual qualities of a manufactured item, allowing startups to safeguard their innovative designs from imitation.

  • Design Thinking

    Design Thinking is an approach to problem-solving that involves understanding user needs, redefining problems, and creating innovative solutions to prototype and test.

  • Developer API

    Developer API (Application Programming Interface) allows programmers to utilize certain functionalities of an external software component or tool, crucial for tech startups integrating third-party services.

  • Developer Evangelist

    Developer Evangelist is a role within companies, particularly tech startups, aimed at promoting the use of a company`s products or services within the developer community.

  • Developer Marketplace

    Developer Marketplace is an online platform where developers can buy, sell, or share their software, tools, or services, providing a resource for startups to find technical solutions.

  • Developer Tools

    Developer Tools are software applications and resources used by programmers to create, debug, maintain, or support other applications and frameworks.

  • Development Stage

    Development Stage refers to the phase in a startup`s lifecycle focused on product development, market research, and establishing operations, often before significant revenue is generated.

  • Digital Assets

    Digital Assets are any text, images, multimedia, or files that are created, stored, or used in digital form. In startups, digital assets can include websites, intellectual property, and software.

  • Digital Footprint

    Digital Footprint refers to the unique set of traceable digital activities, actions, contributions, or communications manifested on the Internet or on digital devices.

  • Digital Nomad

    Digital Nomad describes individuals who leverage telecommunications technologies to earn a living and conduct their life in a nomadic manner, often entrepreneurs who operate their startups remotely.

  • Digital Transformation

    Digital Transformation involves the integration of digital technology into all areas of a business, fundamentally changing how it operates and delivers value to customers.

  • Dilution

    Dilution occurs when a company issues new stock which reduces an existing shareholder`s percentage of ownership.

  • Dilution Protection

    Dilution Protection is a clause in an investment agreement that protects investors from equity dilution in subsequent financing rounds, typically by adjusting the price per share of the existing investment.

  • Dilutive Effect

    Dilutive Effect occurs when the issuance of additional shares reduces an existing shareholder’s ownership percentage, affecting their control and earnings per share.

  • Direct Sales Model

    Direct Sales Model is a business model where products or services are sold directly to customers, bypassing traditional retail channels.

  • Discovery Phase Funding

    Discovery Phase Funding refers to early-stage financial support aimed at validating business concepts and market potential before full-scale development.

  • Disruptive Innovation

    Disruptive Innovation is an innovation that significantly alters the way businesses, industries, or markets operate, often displacing established market-leading firms.

  • Disruptive Technology

    Disruptive Technology refers to an innovation that significantly alters the way consumers, industries, or businesses operate, often displacing established market-leading firms and products.

  • Distributed Team

    Distributed Team refers to a workforce that is spread out across geographical locations, leveraging digital communication technologies to collaborate effectively.