Founder & CTO glossary
Quick references for the metrics, financial concepts, and technical jargon that come up in board decks and diligence calls.
Angel Investor
→An individual who provides early-stage capital and mentorship to startups in exchange for equity.
Bootstrapping
→Building and growing a business using only personal finances and operating revenue.
Burn Rate
→The speed at which a startup spends its available cash reserves, typically measured monthly.
Business Model Canvas
→A one-page visual framework for describing and designing a company's business model.
Cap Table
→A detailed breakdown of company ownership showing who owns what percentage of equity.
Churn Rate
→The percentage of customers who stop using your service over a given period.
Convertible Note
→Short-term debt that converts into equity during a future funding round, typically with a discount.
Customer Acquisition Cost (CAC)
→The average cost to acquire a new customer, including all marketing and sales expenses.
Due Diligence
→Thorough investigation and assessment of a business before finalizing an investment or deal.
Equity
→Ownership stake in a company, typically represented by shares of stock.
Go-to-Market (GTM) Strategy
→A comprehensive plan for launching a product and reaching target customers effectively.
Gross Margin
→The difference between revenue and cost of goods sold, expressed as a percentage.
Initial Public Offering (IPO)
→The process of offering company shares to the public for the first time on a stock exchange.
Lead Generation
→The process of attracting and capturing potential customers' interest for sales pipeline.
Market Segmentation
→Dividing a broad market into smaller groups with shared characteristics and needs.
Minimum Viable Product (MVP)
→The simplest version of a product that can be released to test market demand and gather feedback.
Pivot
→A fundamental change in business strategy based on market feedback and performance data.
Pre-Money Valuation
→A company's estimated value immediately before receiving new investment capital.
Product-Market Fit
→The critical moment when a product successfully satisfies strong market demand in a target segment.
Retention Rate
→The percentage of customers who continue using your product over a specific time period.
Revenue Model
→The framework that defines how a business generates income from its products or services.
Runway
→The amount of time a company can operate before running out of cash at its current burn rate.
Scaling
→Growing revenue exponentially while keeping costs under control to improve profitability.
Seed Funding
→The initial capital raised to validate a business idea and build an early version of the product.
Series A Round
→The first significant round of institutional venture capital financing to scale operations.
Term Sheet
→A non-binding document outlining the key terms and conditions of an investment deal.
Total Addressable Market (TAM)
→The total revenue opportunity available if a product achieves 100% market share.
Unit Economics
→The direct revenues and costs associated with a single unit of your business model.
Valuation
→The process of determining the current worth of a company in monetary terms.
Vesting
→The process of earning the right to equity over time, typically through continued employment.