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.

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Convertible EquityConvertible Equity is an investment vehicle often used in seed rounds where the investment converts into equity at a later financing round.Convertible NoteConvertible Note is a short-term debt that converts into equity, typically in conjunction with a future financing round.Convertible Note CapConvertible 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 CompetenciesCore 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.CovenantCovenant 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-PromotionCross-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 EquityCrowd Equity is a form of crowdfunding that lets investors buy equity stakes in startups online.Crowd LendingCrowd 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.CrowdfundingCrowdfunding 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.CrowdsourcingCrowdsourcing 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 DevelopmentCustomer 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 RateCustomer 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 SegmentationCustomer 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 MeasuresCybersecurity 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 MonetizationData Monetization is the process of using data to generate measurable economic benefits, including through direct selling, enhancing products, or improving customer experience.Data Privacy ComplianceData Privacy Compliance refers to adhering to laws and regulations that protect individuals` personal information, critical for startups collecting or processing user data.Data RoomData 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 MakingData-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 ClosureDeal Closure is the finalization of a fundraising or investment transaction, marking the end of negotiations and the start of partnership or equity exchange.Deal ExecutionDeal Execution refers to the process of completing an investment transaction, from negotiation and due diligence to the final signing and exchange of funds.Deal FlowDeal Flow is the rate at which investment offers or business proposals are received by investors or venture capital firms.Deal RoomDeal Room is a secure online space where confidential documents are stored and shared during financial transactions or negotiations, facilitating the due diligence process.DecacornDecacorn refers to a startup company that has reached a valuation of over $10 billion, a significant milestone in the startup world.Dedicated FundDedicated 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 ModelDedicated 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.DefaultDefault is the failure to repay a debt including interest or principal on a loan or security when due.DelistingDelisting is the removal of a listed security from a stock exchange, making it no longer publicly traded.Demand GenerationDemand Generation is a holistic marketing and sales strategy aimed at generating awareness and interest in a company`s products or services.Design PatentDesign Patent protects the unique visual qualities of a manufactured item, allowing startups to safeguard their innovative designs from imitation.Design ThinkingDesign Thinking is an approach to problem-solving that involves understanding user needs, redefining problems, and creating innovative solutions to prototype and test.Developer APIDeveloper 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 EvangelistDeveloper 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 MarketplaceDeveloper 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 ToolsDeveloper Tools are software applications and resources used by programmers to create, debug, maintain, or support other applications and frameworks.Development StageDevelopment 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 AssetsDigital 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 FootprintDigital Footprint refers to the unique set of traceable digital activities, actions, contributions, or communications manifested on the Internet or on digital devices.Digital NomadDigital 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 TransformationDigital Transformation involves the integration of digital technology into all areas of a business, fundamentally changing how it operates and delivers value to customers.DilutionDilution occurs when a company issues new stock which reduces an existing shareholder`s percentage of ownership.Dilution ProtectionDilution 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 EffectDilutive Effect occurs when the issuance of additional shares reduces an existing shareholder’s ownership percentage, affecting their control and earnings per share.Direct Sales ModelDirect Sales Model is a business model where products or services are sold directly to customers, bypassing traditional retail channels.Discovery Phase FundingDiscovery Phase Funding refers to early-stage financial support aimed at validating business concepts and market potential before full-scale development.Disruptive InnovationDisruptive Innovation is an innovation that significantly alters the way businesses, industries, or markets operate, often displacing established market-leading firms.Disruptive TechnologyDisruptive Technology refers to an innovation that significantly alters the way consumers, industries, or businesses operate, often displacing established market-leading firms and products.Distributed TeamDistributed Team refers to a workforce that is spread out across geographical locations, leveraging digital communication technologies to collaborate effectively.