52 terms
Protection that adjusts an investor's conversion price if the company raises at a lower valuation later.
An individual with $200K+ income or $1M+ net worth (excluding primary residence).
Annual Recurring Revenue — total yearly revenue from subscriptions or contracts.
How much cash a company spends per month above what it earns.
A small funding round meant to keep a company going until the next major raise.
A loan that converts to equity at a future funding round, usually with a discount or cap.
Basic ownership shares in a company with voting rights but last in line for payouts.
A spreadsheet showing who owns what percentage of a company.
Customer Acquisition Cost — how much it costs to win one new customer.
The rate at which customers cancel or stop paying — lower is better.
An investment that converts from one form to actual equity shares at a future trigger event.
Reduction in your ownership percentage when new shares are issued to other investors.
Majority shareholders can force minority shareholders to join in a company sale.
The research process of evaluating an investment opportunity before committing money.
A funding round at a lower valuation than the previous round — bad news for existing investors.
A percentage discount on the share price given to early investors when their SAFE/note converts.
How investors get money back — usually through an acquisition (M&A) or IPO.
Investing in startups through online platforms in exchange for equity or other securities.
The SEC filing that Reg CF companies must submit, containing financial and business details.
Additional capital invested in a company you've already backed in a later round.
Revenue minus cost of goods sold, expressed as a percentage — shows pricing power.
The max you can invest in Reg CF offerings per year, based on your income and net worth.
The right to receive regular financial updates and reports from the company you invested in.
2012 law that legalized equity crowdfunding for non-accredited investors in the US.
Preferred shareholders get paid back first (often 1x their investment) before common stockholders.
Lifetime Value — total revenue expected from a customer over the entire relationship.
An experienced investor who sets the terms and often conducts due diligence for a round.
Monthly Recurring Revenue — predictable monthly income from subscriptions.
Multiple on Invested Capital — how many times you get your money back (e.g., 5x).
Most Favored Nation — ensures your investment terms are at least as good as later investors'.
Revenue kept from existing customers over time, including upsells minus churn.
Shares with priority over common stock for dividends and liquidation payouts.
The company's value before new investment money comes in.
The company's value after new investment money is added (pre-money + amount raised).
The right to invest more in future rounds to maintain your ownership percentage.
Regulation Crowdfunding — allows companies to raise up to $5M from anyone, not just accredited investors.
Allows companies to raise up to $75M with lighter SEC reporting than a full IPO.
Private placement exemption — typically limited to accredited (wealthy) investors.
How many months a company can operate before running out of cash.
An investment where you receive a percentage of the company's revenue until a return cap is met.
Simple Agreement for Future Equity — converts to shares later at a discount or valuation cap.
Securities and Exchange Commission — the U.S. agency that regulates investments and markets.
A group of investors pooling capital together to invest in a deal.
Special Purpose Vehicle — a legal entity created to pool investor money for a single investment.
A marketplace where you can sell private company shares to other buyers before an exit.
A summary of the key terms and conditions of an investment deal.
TAM — the total revenue opportunity available if a product captured 100% of the market.
A third party that tracks share ownership and handles stock transfers for private companies.
The right for minority shareholders to join a sale when majority shareholders sell their shares.
The revenue and costs associated with a single customer or unit — determines profitability.
Maximum valuation at which a SAFE or note converts to equity, protecting early investors.
Shares earned gradually over time — typically 4 years with a 1-year cliff.