Fundraising Glossary

Browse 66 fundraising terms defined in plain English, from the cultural dictionary of computing.

66 Fundraising Terms

Anchor Investor
A major investor whose early commitment helps validate a financing round and attract additional participants. Anchor investors often influence signaling,...
Angel Investor
A wealthy individual who provides capital to startups in exchange for equity, typically at the earliest stages when institutional investors won't touch them....
Angel Round
An early financing round primarily funded by angel investors, usually before or instead of institutional venture capital. It often supports initial product...
Angel Syndicate
A group of angel investors who coordinate to invest together in startups, often through a lead investor or shared vehicle. Syndicates give founders access to...
Bridge Round
An interim financing round raised to extend runway between major rounds, often when a company is not yet ready for its planned next fundraise. Bridge rounds...
Cash Runway
The amount of time a company can continue operating before running out of cash, based on current burn and expected inflows. Runway determines how urgently a...
Closed Round
A financing round that has formally completed, with documents signed and funds committed or wired. Saying a round is closed usually matters more than saying it...
Convertible Note
A form of startup financing structured as debt that typically converts into equity in a later priced round, often with a valuation cap or discount. It is...
Crowdfunding
Raising money from a large number of individuals, usually through online platforms, often in exchange for early access, rewards, or participation. It is common...
Deal Room
A secure shared repository of documents used during fundraising, diligence, or acquisition processes, often containing financials, contracts, and governance...
Deal Terms
The conditions, rights, obligations, and economics attached to a transaction, contract, or financing. Founders often learn that deal terms matter as much as...
Dilution
The reduction in existing shareholders' ownership percentage when new shares are issued in a funding round. Each round typically dilutes founders by 15-25%....
Down Round
A funding round where a company raises capital at a lower valuation than its previous round. Generally considered a bad signal, it dilutes existing...
Draft Term Sheet
A preliminary version of the key financing terms proposed before the final signed term sheet is settled. Draft term sheets are often where major negotiation...
Equity Dilution
The reduction in an existing shareholder's ownership percentage when new shares are issued. Dilution is normal in startup financing, but its impact depends on...
Equity Financing
Raising capital by selling ownership in the company rather than borrowing money. Equity financing is the default model for venture-backed startups because...
Extension Round
An additional financing raised after the main round, often on similar terms, to bring in more capital or extend the company's timeline to the next milestone....
External Funding
Capital brought into the company from outside sources such as investors, lenders, or grant makers rather than from internal revenue or founder savings. The...
Flat Round
A financing round raised at roughly the same valuation as the previous round rather than at a step-up valuation. Flat rounds can preserve continuity but may...
Funding Round
A discrete event in which a startup raises capital from investors under a defined set of terms. Funding rounds mark shifts in ownership, valuation, and company...
Future Valuation
The expected value a company may justify in a later financing or exit based on projected growth, market conditions, and milestones. Founders and investors use...
Growth Capital
Capital raised specifically to accelerate expansion rather than merely survive, often used for hiring, new markets, product scale, or acquisitions. It usually...
Initial Coin Offering
A fundraising method where a project sells newly issued tokens to the public or early participants, often before the product is fully mature. ICOs were a...
Inside Round
A financing round led primarily by existing investors rather than new outside firms. Inside rounds can signal strong internal conviction or difficulty...
Investor Deck
The presentation founders use to explain the company to investors during fundraising, covering problem, solution, market, traction, team, and financing ask. A...
Investor Update
A recurring report founders send to investors summarizing company progress, key metrics, asks, risks, and milestones. Good investor updates build trust and...
Late Stage
Describing companies that are relatively mature by startup standards, with substantial revenue, larger teams, and closer proximity to liquidity events such as...
Lead Investor
The investor who anchors a financing round, usually setting key terms, taking the largest check, and often taking a board seat. Getting a strong lead investor...
Liquidation Preference
A financing term that determines how much investors receive before common shareholders when the company is sold or liquidated. The structure can materially...
Milestone
A significant target or threshold used to measure progress, such as first revenue, product launch, hiring completion, or a financing goal. Startups use...
Over-Capitalized
Having raised more capital than the business can deploy effectively at its current stage, often creating pressure to spend ahead of product-market fit or...
Participation Rights
Rights allowing investors to participate in future financings to maintain or increase their ownership, and in some contexts referring to participating...
Pitch
A concise persuasive presentation of a company, product, or opportunity to investors, customers, partners, or recruits. Strong pitches are clear about problem,...
Pitch Deck
A brief presentation — typically 10-20 slides — used by a startup to pitch its business to potential investors. The most common structure covers problem,...
Pitch Practice
The rehearsal process founders use to improve timing, clarity, story flow, and responses before real investor or customer meetings. Good pitch practice...
Post-Money Valuation
The value of a company immediately after new investment capital is added, equal to pre-money valuation plus the amount raised. Post-money matters because...
Pre-Money Valuation
The value of a company immediately before new investment capital is added in a financing round. It is the starting point for calculating post-money valuation...
Pre-Revenue
Describing a company that has not yet generated meaningful revenue from customers. Pre-revenue status is common early on, but investors then rely more on team,...
Pre-Seed
A funding round before the seed round — typically $50K-$500K from angels, accelerators, or friends and family. The stage where you have a slide deck, a dream,...
Pro Rata
In proportion to an existing ownership stake or allocation. In venture financings, pro rata rights let investors buy enough in later rounds to maintain their...
Raise
To secure external capital from investors or other sources for the company. In founder speech, 'raising' usually implies the entire process of pitching,...
Round Size
The total amount of money being raised in a financing round. Round size shapes runway, dilution, investor mix, and expectations about what milestones should be...
SAFE Convertible Note
A SAFE-style early-stage financing instrument that behaves like a future-conversion claim rather than immediate priced equity, used to raise money before a...
Secondary Sale
A transaction where existing shareholders sell shares to another investor instead of the company issuing new shares. Secondary sales can provide liquidity...
Seed
A very early financing stage used to support initial product building, customer validation, and team formation. Seed capital is meant to help a startup prove...
Seed Extension
Additional capital raised after an original seed round, often on similar terms, to extend runway or support extra milestones before a full Series A. It is...
Seed Round
The first institutional funding round for a startup, typically raising $500K-$5M to build an initial product and prove the concept. Named because you're...
Seed Stage
The earliest institutional startup stage, when product, market, and go-to-market assumptions are still being validated. Seed-stage companies usually have high...
Series A / B / C
Sequential rounds of venture capital funding, each typically larger than the last. Series A usually follows a seed round and establishes product-market fit; B...
Series B
A financing round that typically follows Series A and is often used to scale go-to-market, product breadth, and organizational capacity once some repeatability...
Series C
A later-stage financing round usually associated with a company that has substantial traction and is funding further scale, market expansion, or acquisitions....
Series D
A relatively late private financing round raised by companies continuing to scale, preparing for liquidity, or extending runway under complex conditions. Not...
Series Seed
A priced seed financing rather than a SAFE or note, often used when the company wants a more formal institutional seed structure. The term signals an early but...
Startup Funding
The capital a startup raises or secures to build product, hire people, and extend runway while it grows. It can come from founders, angels, venture funds,...
Startup Pitch
A structured presentation or explanation of a startup’s problem, solution, market, traction, and business case intended to persuade investors, customers, or...
Startup Valuation
The estimated value assigned to a startup in fundraising or transaction contexts, often influenced by growth potential, comparables, market conditions, and...
Syndicate Lead
The investor who organizes a syndicate, sets the terms for other participants, and often serves as the central point of trust and coordination. In angel...
TAM Metric
The total addressable market figure used to estimate the full revenue opportunity if a company could serve all plausible demand in its category. Because TAM...
TAM / SAM / SOM
Total Addressable Market / Serviceable Addressable Market / Serviceable Obtainable Market — three concentric circles of market opportunity used in pitch decks....
Team Slide
The part of a pitch deck that introduces the founders and key leaders, usually to argue why this group is credible enough to win the market. Investors often...
Term Sheet
A non-binding document outlining the key terms and conditions of a proposed investment. Typically includes valuation, investment amount, liquidation...
Type of Round
The classification of a financing event, such as pre-seed, seed, Series A, bridge, extension, or secondary-heavy transaction. The type of round affects...
Up Round
A financing round raised at a higher valuation than the previous round. Up rounds signal progress and market confidence, though the quality of the underlying...
Valuation
The value assigned to a company in a financing, transaction, or internal analysis. In startups, valuation reflects not just current performance but also...
Valuation Cap
A maximum valuation used in instruments like SAFEs or convertible notes to determine the price at which an early investor converts into equity. A lower cap...
Venture Debt
Debt financing provided to venture-backed companies, usually to extend runway without a full equity round. Venture debt preserves ownership more than equity...

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