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Startup Terms 

There are certain startup terms that every startup founder should know (especially for meetings with investors).  We've summarized all of those important terms below.  

Click on any highlighted term below for more in-depth information

A

  • accelerator

  • accredited investor 

  • acquisition 

  • adverse change redemption 

  • advisor 

  • analyst

  • angel investor 

  • ARR - annualized run rate

  • anti-dilution 

  • as-converted basis 

  • assets

  • automatic conversion 

B

  • basis of stock option

  • blended preference 

  • Board of Advisors 

  • Board of Directors 

  • bridge loan 

  • broad-based weighted-average anti-dilution 

  • burn rate 

 C 

  • cap 

  • capitalization (or cap) table

  • capped participation 

  • carve-out

  • churn rate

  • clawback 

  • CLV - customer lifetime value

  • common stock 

  • control 

  • conversion 

  • conversion right 

  • conversion threshold

  • convertible debt 

D 

  • dilution 

  • director 

  • D&O insurance 

  • double-trigger 

  • down round 

  • drag-along rights 

  • DRR - dollar revenue retention

  • due diligence 

​

F

  • fair market value (FMV) 

  • flat round 

  • forward triangular merger

  • FTEs (full-time equivalents) 

  • full participation 

  • full-ratchet anti-dilution

  • fully diluted 

 E 

  • early-stage 

  • EIP - equity incentive plan

  • employee pool 

  • ESOP - employee stock option pool 

  • escrow 

  • escrow cap 

  • equity 

  • exercises (i.e., exercises warrants) 

​

G

  • golden parachute 

H

​

I

J

​

K

L

  • late-stage 

  • lead investor 

  • lean startup method 

  • liabilities

  • liquidation performance overhang

  • liquidation preference 

  • liquidation (liquidity) event

M

N

  • NQO - non-qualified stock option

O

  • officer 

  • option budget 

  • option pool 

P

  • pay-to-play

  • phantom stock

  • post- money 

  • pre-money 

  • preferred stock 

  • preference 

  • price 

  • price per share 

  • pro rata rights 

Q

​

R

  • ratchet-based anti-dilution

  • retention incentive

  • reverse triangular merger

  • ROI (return on investment) 

S 

T

  • tender offer

  • term sheet 

  • transaction cost 

​

​

 U - V 

  • valuation 

  • VC fund 

  • venture capitalist (VC) 

  • vesting 

  • vesting cliff 

​​W - X 

  • warrants 

  • weighted average anti-dilution

 

 

​Y - Z 

  • Y Combinator 

  • zone of insolvency 

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