Assembled by Chris Kauzmann and Lisa Getzler

Acquisition: one company buys most or all of another company’s shares to gain control of that company.

Angel Investor: a high-net-worth individual or networked group of individuals who provide (via their own money) financial backing for small startups or entrepreneurs, typically in an early pre-seed or seed round in exchange for equity ownership in the company.

API: application programming interface (API). A set of programming codes used to query data, parse responses, and send instructions between one software platform and another.

Blockchain: a digital system of recording information. A blockchain is essentially a digital ledger of transactions that is duplicated and distributed across the entire network of computer systems on the blockchain. This distributed structure makes it difficult to change, hack, or cheat the system. Blockchains are best known for their crucial role in cryptocurrency systems.

Blue Ocean: an entrepreneurship industry term used to describe a new market with little competition or few barriers. In contrast to a “red ocean,” a blue ocean isn’t already saturated with participants. It’s full of opportunities for innovation.

Bootstrapping: starting a company with little capital, relying on money other than outside investments.

Business to Business (B2B): the term B2B may describe a business, product, service, or transaction. It means business is being conducted between companies, rather than between a company and individual consumers.

Business to Consumer (B2C): the term B2C may describe a business, product, service, or transaction. It means products and services are being sold by a business to individual consumers (not to other businesses).

Burn Rate: the rate at which a new company is spending venture capital (typically) to finance its overhead before generating positive cash flow.

Convertible Note: short-term debt that converts into equity.

Cliff Vesting: the process by which employees earn the right to receive prescribed benefits (equity, retirement contributions, etc.) from their company at a specified date, rather than becoming vested gradually over a period of time.

Crowdfunding: the use of small amounts of capital from a large number of individuals to finance a new business venture or project.

Cryptocurrency: a digital or virtual currency (e.g. Bitcoin) that is secured by cryptography based on blockchain technology, which makes it nearly impossible to counterfeit or double-spend.

Customer Discovery: the initial and iterative process of understanding customers’ situations, needs, and pain points.

Deck or Pitch Deck: a slide presentation used by a founder when pitching to investors.

Dilution: a decrease in existing stockholders’ ownership percentage of a company that occurs when the company issues new shares.

Disruptive Technology: an innovation that significantly alters the way that consumers, industries, or businesses operate.

Due Diligence: an investigation of a potential investment (such as a startup) to confirm all facts. For example, investors might look at financial records, interview customers, and explore other indicators of a company’s performance.

Equity: the amount of money that would be returned to a company’s shareholders if all of the assets were liquidated (and all of the company’s debt was paid off).

Exit Event: occurs when the owners of a company “exit” the business by selling it. Exit events can take the form of an Initial Public Offering (IPO), acquisition, or selling shares.

Follow-on Funding: additional funding for a firm following the initial investment made by investors. Firms that qualify typically obtain their money in stages that correspond to their stage of development. Once a venture capitalist makes an investment in a firm, subsequent investments are made in rounds (or stages) and are referred to as follow-on funding.

Fiat Money: a government-issued currency that is not backed by a physical commodity, such as gold or silver, but rather by the government that issued it.

Friends and Family Round: funding that allows a startup to get through its first few months of operation (typically $10,000 to $150,000). The funding comes from friends, family, and personal connections, rather than an accredited investor. This is one way in which founders “bootstrap.”

Gas Fees: the fee, or pricing value, required to successfully conduct a transaction or execute a contract on the Ethereum blockchain platform.

EBITDA: earnings before interest, taxes, depreciation, and amortization. This is a measure of a company’s overall financial performance and is sometimes used as an alternative to net income.

Incubator: an organization engaged in the business of fostering early-stage companies through the different developmental phases until the companies have sufficient financial, human, and physical resources to function on their own.

Intellectual Property (IP): an umbrella term for a set of intangible assets such as inventions and designs. Intellectual property is owned by a company or individual and can be legally protected via patents & copyrights to prevent outside use or implementation without consent or compensation.

Initial Public Offering (IPO): An initial public offering or stock launch is a public offering via a stock exchange, like the Nasdaq or NYSE, in which shares of a company are sold to institutional investors and usually also retail investors.

Key Performance Indicators (KPIs): the measurable outcomes of business decisions that leaders specify as necessary to continue running and resourcing a company, product or service.

Lifestyle Business: a business set up and run by its founders primarily with the aim of sustaining a particular level of income and no more. Such companies may be multi- million dollar companies in terms of revenue or equity. However, they tend to be self- limiting in their ability to expand and are not designed for scale. They tend to be focused on one or more key persons, the loss of whom will stop the company in its tracks.

Metaverse: a digital reality that combines aspects of social media, online gaming, augmented reality (AR), virtual reality (VR), and cryptocurrencies to allow users to interact virtually.

Minimum Viable Product (MPV): a product with enough features to attract early-adopter customers and validate a product idea early in the product development cycle.

Mining: a process by which new bitcoins are entered into circulation. Mining is also the way that new transactions are confirmed by the network and a critical component of the maintenance and development of the blockchain ledger. It is performed using sophisticated hardware that solves an extremely complex computational math problems.

Non-Fungible Tokens (NFTs): cryptographic assets on a blockchain with unique identification codes and metadata that distinguish them from each other.

Post-Money Valuation: a company’s estimated worth after outside financing and/or capital injections are added to its balance sheet.

Pre-Money Valuation: a company’s estimated worth before it goes public or receives new investments.

Product-Market Fit: the alignment between customers’ specific problem/need/desire and the solution a business has created for them.

Return on Investment (ROI): A performance measure used to evaluate the efficiency or profitability of an investment or compare the efficiency of a number of different investments. ROI tries to directly measure the amount of money made on a particular investment, relative to the investment’s cost.

SAFE Note: SAFE (or Simple Agreement for Future Equity) notes are documents that startups often use when raising seed capital. Essentially, a SAFE note acts as a legally binding promise to allow an investor to purchase a specified number of shares for an agreed-upon price at some point in the future.

Seed Funding: the type of financing used in the formation of a startup. Funding is provided by private investors—usually in exchange for an equity stake in the company or for a share in the profits of a product.

Series A, B, C, etc.: after startups raise “seed” funding or angel investor funding at the outset, they may raise more money during funding “rounds” that are called Series A, Series B, Series C, etc. These are necessary ingredients for a business that decides bootstrapping, or merely surviving off of the generosity of friends, family and the depth

of their own pockets, will not suffice.

Software as a Service (SaaS): a software licensing model in which access to the software is provided on a subscription basis.

Special Purpose Acquisition Company (SPAC): a company without commercial operations that is formed strictly to raise capital through an initial public offering (IPO) for the purpose of acquiring or merging with an existing company.

Term Sheet: a non-binding agreement that shows the basic terms and conditions of an investment.

Unicorn: an industry term used to describe a privately held startup company with a value of over $1 billion.

Venture Capital (VC): a type of private equity financing in which professionally managed investment funds are provided to startup companies in exchange for some amount of negotiated ownership in the company. Appropriate for startups that are predicted to have long-term growth potential and a profitable exit.

Venture Debt: a type of financing that some startup companies seek, typically provided in the form of a loan. Unlike equity financing, venture debt doesn’t typically involve giving up ownership in the company.

Vesting: a legal term that refers to the point in time when the rights and interests arising from legal ownership of a company are acquired by an employee. A vesting schedule is an incentive program for employees that gives them benefits, usually stock options, after they have worked at a company for a specified period of time.