Startup & Investment Terms (YA EFL)

Angel Investor

An investor who backs startups in the early stages before most firms would.

Assets = Liabilities + Equity

The formula to derive the assets of the company.

Balance Sheet

A file or sheet detailing the assets and liabilities of a company at a given point in time.

Business Model

Strategy for how the company will operate in terms of managing costs and gaining revenue.

Capital

Cash or liquid assets being held or obtained for expenditures.

Capital Expenditure

Money spent by a business on acquiring or maintaining fixed assets, such as land, buildings, and equipment.

Cash Flow

Net amount of cash flowing in and out of the company.

COGS (Cost of Goods Sold)

Costs associated with selling the goods in the marketplace.

Debt

Money owed to outside factions due to borrowing or loans.

Entrant

A new competitor in a certain sector or industry competing for market share.

Equity

Stake or value that would be returned to the company's shareholders if sold.

Exit

When investors sell their stake in a company.

Founder

A person who starts a company.

Go-to-Market Strategy

The plan a company uses to promote, sell, and deliver its product to customers.

Income Statement

A file or sheet detailing the financial performance of the company.

Incubator/Accelerator

A program that helps foster young startups to maturity.

IPO (Initial Public Offering)

When a company is able to be bought as a stock on public markets.

MVP (Minimum Viable Product)

The simplest version of a product released to test demand and collect feedback.

Pitch Deck

A presentation that provides an overview of a startup to potential investors.

Product-Market Fit

When a startup's product satisfies strong market demand.

Runway

How long a startup can operate before running out of money.

Sector / Industry

Sector is a large segment of the economy; industry is a more specific group of companies.

Startup Capital

Money used by startups to fund initial operations.

Scalability

The ability for a company to grow quickly and efficiently.

AUM (Assets Under Management)

Value of money managed by a firm.

Cap Table (Capitalization Table)

Spreadsheet showing ownership stakes in a company.

Convertible Note / SAFE

Early-stage fundraising tools that convert into equity later.

Dilution

Reduction in existing shareholders' ownership when new shares are issued.

Down Round

A funding round in which the company is valued lower than in previous rounds.

EBITDA / Revenue

Earnings before interest, taxes, depreciation, and amortization.

Financing

Raising capital through equity (selling ownership) or debt (borrowing).

Lead Investor

The main or most prominent investor in a funding round.

Pro Rata Rights

An investor's right to maintain their ownership percentage in future rounds.

Seed, Series A, B...

Stages of startup funding, from early-stage (Seed) to more mature rounds (Series B).

Term Sheet

A nonbinding document outlining the basic terms and conditions of an investment.

Unicorn

A startup valued at $1 billion or more.

Decacorn

A startup valued at $10 billion or more.

Valuation

Assessed market value of a business.

Value-Add

The benefits (tangible or intangible) an investor brings beyond just money.

Bridge Round

Small funding round meant to help a startup reach the next larger round.

B2B / B2C

Business-to-Business (selling to companies) / Business-to-Consumer (selling to individuals).

Bootstrapping

Starting a company using personal savings or revenue instead of outside funding.

Burn Rate

How quickly a startup is spending its available cash.

Churn Rate

Percentage of customers who stop using a service over time.

Customer Acquisition

The process and cost of gaining new customers.

KPI (Key Performance Indicator)

A measurable value showing how effectively a company is achieving its goals.

Networking

Building relationships that can help professionally or lead to business opportunities.

Pivot

A strategic shift in business direction based on feedback or performance.

Revenue Model

How a company earns money (subscriptions, ads, sales, etc.).

ROI (Return on Investment)

Measure of the gain or loss on an investment relative to its cost.

SaaS (Software as a Service)

A software model where users subscribe rather than purchase (e.g. Netflix, Google Workspace).

Unit Economics

Revenue and costs associated with serving a single customer or product unit.

Mentor

An experienced person who advises and supports a startup team or founder.

Key Partners

The network of suppliers and partners that help the business model work.

(Who do you need to work with?)

Key Activities

The most crucial actions a company must take to make its business model work.

(What do you need to do well?)

Key Resources

The essential assets required to offer and deliver the value proposition.

(What do you absolutely need to have?)

Cost Structure

All the expenses incurred to operate a business model.

(What are your biggest expenses?)

Value Propositions

The bundle of products and services that create value for a specific customer segment.

(What are you offering, and why should anyone care?)

Customer Segments

The different groups of people or organizations a business aims to reach and serve.

(Who are your customers?)

Customer Relationship

The nature of the interaction and relationship between the company and its customers.

(How do you get, keep, and grow your customer base?)

Channels

The touchpoints a company uses to communicate with and deliver value to its customer segments.

(How do you get your product or service to your customers?)

Revenue Stream

The cash a company generates from each customer segment.

(How will you make money?)