A 409A valuation is an independent assessment of a startup's fair market value, crucial for equity compensation, tax implications, and regulatory compliance.
Read moreThe 83(b) election lets startup founders or employees pay taxes on equity early, potentially saving thousands if made at the right time.
Read moreThe accounting equation (Assets = Liabilities + Equity) is the foundation of double-entry bookkeeping, crucial for financial reporting and analysis.
Read moreModern accounting software now includes advanced features like cash flow forecasting, inventory management, project tracking, and business intelligence.
Read moreAccounts Payable (AP) represents the short-term liabilities a business owes to its suppliers for goods or services received but not yet paid for.
Read moreAccounts Receivable (AR) represents money owed to a business by its customers for goods or services delivered on credit.
Read moreAccounts Receivable Loans are short-term financing options where businesses use their unpaid customer invoices as collateral to secure immediate funds.
Read moreAn Accredited Investor is an individual or institution permitted to invest in private, high-risk securities not registered with financial regulators.
Read moreAccrual Accounting records revenues and expenses when they are earned or incurred, not when cash is received or paid.
Read moreAccrued Expenses are expenses a business has incurred but has not yet paid or received an invoice for by the end of an accounting period.
Read moreAccrued interest is the interest that has accumulated on a debt or bond but hasn't been paid yet. It's a liability for borrowers and an asset for lenders.
Read moreAn acquihire is an acquisition strategy focused on acquiring a company's talent rather than its product, technology, or customer base.
Read moreAn Acquisition is a corporate strategy where one company purchases most or all of another company’s shares or assets to gain control of it.
Read moreActivity-Based Budgeting (ABB) is a budgeting method that focuses on identifying and analyzing business activities that drive costs.
Read moreAdjusted Gross Income (AGI) is an individual’s total gross income from all taxable sources, minus specific deductions allowed by tax authorities.
Read moreAdvisory Shares are equity given to company advisors, usually in startups, as compensation for their expertise, connections, or strategic input.
Read moreAn Allocation is the process of distributing financial resources, costs, or profits across departments, projects, or investment categories in an organization.
Read moreAlternative Financing refers to non-traditional funding options outside of conventional bank loans or public stock issuance.
Read moreAmortization is the systematic process of gradually reducing a debt or the value of an intangible asset over a specific period.
Read moreAn Angel Investor is a high-net-worth individual who provides capital to early-stage startups in exchange for equity ownership or convertible debt.
Read moreIt is a startup's first formal fundraising round, where capital is raised from angel investors to fund product development, market entry, and operations.
Read moreAnnual Contract Value (ACV) measures the average annualized revenue from a single customer contract, excluding one-time fees or variable charges.
Read moreAnnual Percentage Yield (APY) is the real annual return on a deposit or investment, factoring in the effects of compounding interest.
Read moreAnnual Recurring Revenue (ARR) is the predictable revenue a subscription-based business expects to earn annually from active contracts or subscriptions.
Read moreAn Anti-Dilution Clause protects existing investors from equity dilution caused by future share issuances at lower prices.
Read moreAnti-Dilution Ratchets are clause that protect early investors from dilution if a company issues new shares at a lower valuation than their original investment.
Read moreAn Asset is any resource owned or controlled by a business or individual that holds current or future economic value.
Read moreAsset Financing involves securing loans or credit by using a company’s assets, like inventory, accounts receivable, equipment, or property, as collateral.
Read moreThe Asset Turnover Ratio is a financial efficiency metric that measures how effectively a company uses its assets to generate revenue.
Read moreAn audit independently verifies a company's financial records for accuracy and compliance. It can be internal or external.
Read moreAverage Revenue Per User (ARPU) measures the average revenue generated per customer over a period, commonly used by subscription and platform businesses.
Read moreA B Corporation is a for-profit company certified to meet rigorous standards of social and environmental performance, accountability, and transparency.
Read moreA Balance Sheet is a financial statement that provides a snapshot of a company's financial position at a specific point in time.
Read moreBalance Sheet Financing is a funding strategy where a company secures capital based on the strength and assets reported on its balance sheet.
Read moreBank reconciliation compares a company's internal financial records with bank statements to ensure both sets of records match.
Read moreA Basis Point (often abbreviated as "bp" or "bps") is a unit of measurement equal to 1/100th of 1 percent (0.01%).
Read moreBillings refers to the total value of invoices issued by a company to its customers for goods delivered or services rendered during a specific period.
Read moreA Board Director is a member of a company's Board of Directors, overseeing activities, making major decisions, and representing shareholders' interests.
Read moreBookings refers to the total value of contracts or orders received and confirmed by a company during a specific period.
Read moreBootstrap Funding is when entrepreneurs grow a business using personal savings and revenue, with little or no outside investment.
Read moreBootstrapping is starting and growing a business without external funding, using personal savings, reinvested profits, or operational revenue instead.
Read moreBottom Line refers to a company's net profit, the final amount on an income statement after all expenses, taxes, and costs are deducted from revenue.
Read moreBreak-even points (BEPs) are the levels where a business’s total revenue equals its total costs, resulting in neither profit nor loss.
Read moreA bridge loan is a short-term financing tool that provides immediate capital while a borrower secures longer-term funding or waits for cash inflows.
Read moreBudget forecasting is the process of estimating future revenues, expenses, and cash flow over a specific time period, typically monthly, quarterly, or annually.
Read moreBudget variance analysis is the process of comparing a company’s projected budget against actual results to identify where and why deviations occurred.
Read moreBurn Multiple is a startup metric that measures cash efficiency, calculated by dividing net cash burned by net new ARR (Annual Recurring Revenue) over a period.
Read moreBurn rate is the rate at which a company spends its available capital or cash reserves to cover operating expenses, typically expressed monthly.
Read moreBusiness expenses are operational costs incurred during daily activities, typically tax-deductible, recorded to assess profitability and manage budgets.
Read moreA business incubator supports early-stage startups by providing resources, mentorship, infrastructure, and networking to help them grow and succeed.
Read moreA Business Model is a strategic plan showing how a company creates, delivers, and captures value through operations, revenue, customer service, and profits.
Read moreBuy Now, Pay Later (BNPL) lets customers buy products or services instantly and pay over time, often in interest-free installments, offering flexible financing.
Read moreA C Corporation (C Corp) is a legal business structure where the company is considered a separate taxable entity, distinct from its owners.
Read moreA Cap Table (short for Capitalization Table) is a detailed spreadsheet or document that outlines the ownership structure of a company.
Read moreIn business and finance, Capital refers to financial resources or assets that a business can use to fund operations, invest in growth, or acquire other assets.
Read moreThe Capital Asset Pricing Model (CAPM) is a financial formula used to estimate the expected return on an investment based on its risk relative to the market.
Read moreThe Capital Cycle describes the process through which businesses and industries allocate capital, compete for resources, and respond to market profitability.
Read moreCapital employed is the total capital a business uses, combining both equity and debt, to generate profits and fund assets and operations.
Read moreCapital Expenditures (CapEx) are funds used by a business to acquire or maintain long-term assets like property, equipment, or technology.
Read moreCapital gains are profits from selling an asset for more than its original purchase price, applying to stocks, real estate, businesses, and other investments.
Read moreCarried Interest is a share of profits paid to fund managers as a reward for generating strong returns, common in private equity and venture capital.
Read moreCash accounting records revenues and expenses only when cash is received or paid, unlike accrual accounting, which records them when incurred.
Read moreCash burn refers to the rate at which a company spends its cash reserves to cover operating expenses before achieving positive cash flow.
Read moreCash Burn Rate quantifies the amount of cash a company depletes over a specific time period — typically measured monthly.
Read moreThe Cash Conversion Cycle (CCC) measures the time it takes for a business to convert investments in inventory and resources into cash from sales.
Read moreA cash disbursement is a business payment using cash, checks, or transfers to settle expenses like bills, salaries, or rent.
Read moreCash flow is money moving in and out of a business. Even profitable firms can fail without enough cash, making it a key sign of financial health.
Read moreA cash flow forecast estimates the money expected to flow in and out of a business over a future period, typically weekly, monthly, or quarterly.
Read moreCash Flow from Operating Activities (CFO) measures the cash generated or used by a company’s core operations, cash from investing or financing activities.
Read moreCash management is the process of collecting, handling, and investing cash to maintain liquidity for short-term needs while maximizing returns on idle funds.
Read moreThe cash out date is the projected date when a company will deplete its existing cash reserves, based on its current and projected cash burn rate.
Read moreA cash projection model is a financial forecasting tool that estimates future cash inflows and outflows over a defined period — usually 6-12 months.
Read moreThe cash zero date is the point when a business is expected to run out of cash, based on current operating expenses, liabilities, and incoming cash flows.
Read moreA Certified Public Accountant (CPA) is a licensed financial professional qualified to perform accounting, auditing, tax, and consulting services.
Read moreA Chart of Accounts (COA) is a structured list of all financial accounts in a company’s ledger, used to categorize transactions for accurate reporting.
Read moreThe Chief Financial Officer (CFO) is a senior executive responsible for managing a company’s financial strategy, reporting, and risk management.
Read moreThe Chief Operating Officer (COO) is the executive responsible for overseeing a company’s day-to-day operational activities.
Read moreChurn refers to the percentage of customers or subscribers who stop doing business with a company over a given period.
Read moreCliff vesting is when an employee must work a set period before any benefits or stock options become vested or claimable.
Read moreCloud accounting is the practice of using online software hosted on remote servers to manage, record, and process a business’s financial transactions.
Read moreCohort analysis groups customers or data points by shared characteristics within a time period, helping businesses observe trends and patterns over time.
Read moreCommon stock represents ownership in a company, offering voting rights and potential dividends, but ranks below preferred stock in liquidation priority.
Read moreCompetitive analysis is the process of evaluating the strengths, weaknesses, strategies, and market positions of current and potential business rivals.
Read moreThe Compound Annual Growth Rate (CAGR) measures the steady growth rate of investments or financial metrics over time, focusing on its calculation & significance
Read moreCompounded Monthly Growth Rate (CMGR) measures the consistent month-over-month growth rate needed to achieve a specific value over a period.
Read moreContra revenue reduces a company's total revenue by accounting for discounts, returns, and allowances, helping reflect actual earned income.
Read moreIn business and economic contexts, contraction refers to a decline in economic activity, revenue, or business operations over a period.
Read moreContribution margin is the amount left from sales revenue after subtracting variable costs, helping cover fixed costs and generate profit.
Read moreConvertible equity is a hybrid investment used by startups, structured as a convertible note or security, that acts like equity but can convert into stock later
Read moreCorporate Venture Capital (CVC) is when a corporation invests in startups, aiming for strategic benefits beyond just financial returns.
Read moreCost of debt is the effective interest rate a company pays on borrowed fund, reflecting the expense of financing through loans, bonds, or other debt instrument.
Read moreCost of Goods Sold (COGS) represents the direct costs incurred in producing goods or services sold by a business.
Read moreCost Per Acquisition (CPA) measures the total marketing and sales spend required to acquire a new customer, subscriber, or lead.
Read moreCost Per Click (CPC) is an online advertising pricing model where advertisers pay each time a user clicks on their ad.
Read moreA cost structure refers to the categorization and breakdown of all the costs a business incurs to operate, produce goods or services, and generate revenue.
Read moreA cram-down round is a down financing event where new capital is raised at a much lower valuation, significantly diluting existing shareholders' equity.
Read moreCredit risk is the possibility of a financial loss arising from a borrower's failure to repay a loan or meet contractual obligations.
Read moreCross-selling is a sales strategy where a business encourages existing customers to purchase additional, complementary, or related products and services.
Read moreCrowdfunding is a method of raising small amounts of capital from a large number of individuals, typically via online platforms.
Read moreCurrent assets are assets expected to be converted into cash, sold, or consumed within one year or the business’s operating cycle, whichever is longer.
Read moreCurrent ratio is a liquidity metric that measures a business’s ability to pay its short-term obligations with its short-term assets.
Read moreCustomer Acquisition Cost (CAC) is the average cost to gain a new customer, including marketing, sales, advertising, and related expenses.
Read moreA data room is a secure, organized digital or physical space where a company stores critical business, financial, operational, and legal documents.
Read moreDays Sales Outstanding (DSO) is a financial metric that indicates the average number of days a company takes to collect payment after a sale is made.
Read moreDebt capital is borrowed money used by a company for operations or expansion, requiring repayment with interest, unlike equity capital.
Read moreA debt covenant is a condition in a loan agreement that limits the borrower’s actions to protect the lender’s interests and ensure financial discipline.
Read moreDebt financing involves borrowing capital to be repaid with interest over time, through loans, bonds, or credit lines.
Read moreThe debt ratio measures the proportion of a company’s total liabilities to its total assets, indicating how much debt is used to finance its operations.
Read moreDSCR measures a company’s ability to service its debt using its operating income. It reflects how comfortably a business can meet its debt obligations.
Read moreDebt-to-Equity (D/E) ratio compares a company’s total debt to its shareholder equity. It assesses financial leverage and risk.
Read moreDebt-to-Income (DTI) ratio compares monthly debt payments to income, helping lenders evaluate an individual’s or business’s creditworthiness.
Read moreDeferred revenue (or unearned revenue) represents payments a company receives for goods or services it has not yet delivered
Read moreDepreciation is an accounting method that allocate the cost of a tangible asset over its useful life, reflecting its value reduction due to wear, age, or usage.
Read moreA digital wallet is an electronic system that securely stores payment information, personal credentials, and other sensitive data for financial transactions.
Read moreDilution occurs when a company issues additional shares of stock, thereby reducing the ownership percentage of existing shareholders.
Read moreDiscounted Cash Flow (DCF) is a valuation method that estimates the present value of a business or investment based on its expected future cash flows.
Read moreA dividend is a share of company’s profits distributed to shareholders, typically in cash or shares, reflecting company’s financial health and profitability.
Read moreDividend Yield measures the annual dividend income an investor receives relative to the market price of a company’s stock.
Read moreDoing Business As (DBA) refers to the practice of operating a business under a trade name different from its registered legal name.
Read moreDollar-Based Net Expansion Rate (DBNER) measures the percentage change in revenue from existing customers, factoring in upgrades, downgrades, and churn.
Read moreDouble-trigger acceleration speeds up vesting in stock agreements when two conditions are met: a company control change and employment termination.
Read moreA Down Round is a financing event where a company raises capital by issuing new shares at a lower valuation than its previous funding round.
Read moreDue diligence is a detailed review to assess a business’s financial, legal, and operational health before an investment or acquisition.
Read moreEarnings Before Interest and Taxes (EBIT) represents a company’s profitability from core operations before deducting interest expenses and income taxes.
Read moreEarnings Before Taxes (EBT) is a profitability measure that shows a company's income after operating expenses and interest, but before income tax deductions.
Read moreEarnings Per Share (EPS) is a financial metric that indicates the portion of a company’s profit attributable to each outstanding ordinary share.
Read moreEBITDA is a measure of a company's operating performance, excluding interest, taxes, depreciation, and amortization.
Read moreEconomic Order Quantity (EOQ) is an inventory formula used to determine the optimal order quantity that minimizes total inventory costs.
Read moreEnterprise Value (EV) is a comprehensive measure of a company’s total market value, reflecting not just its equity but also its debt and cash positions.
Read moreAn Entrepreneur in Residence (EIR) is a temporary, typically senior-level role within a venture capital firm, private equity fund, accelerator, or corporation.
Read moreEquity represents ownership in a business, calculated as the difference between a company’s assets and liabilities, reflecting the owners' stake
Read moreEquity capital is funds raised by issuing ownership shares, with no repayment or interest, but involves sharing ownership and profits.
Read moreEquity Crowdfunding is when startups raise capital from many individual investors online, offering equity shares in return.
Read moreEquity Dilution occurs when a company issues additional shares, reducing the ownership percentage of existing shareholders.
Read moreAn equity stake is the percentage of ownership an investor holds in company, giving them rights to profits, voting power, and proceeds from acquisitions or IPOs
Read moreEstimated tax payments are advance payments made to tax authorities on income not subject to withholding, like business profits, capital gains, or rental income
Read moreETC financing helps businesses manage cash flow and reduce risk in international trade. This guide covers how it works, its benefits, and how to leverage it.
Read moreAn Exit Strategy is a planned approach for business owners and investors to liquidate their stake in a company, realizing their financial returns.
Read moreExpansion is the phase where a company scales operations, market reach, or products to increase revenue and market share.
Read moreAn Expense Reimbursement Policy outlines the rules, procedures, and limits for employees to claim business-related expenses incurred during work activities.
Read moreExpenses are the costs a business incurs in its operations to generate revenue.
Read moreA factor rate is a financing pricing model commonly used in merchant cash advances (MCAs) and short-term business funding arrangements.
Read moreFair Market Value (FMV) is the price at which an asset would be exchanged between a knowledgeable, willing buyer and seller in a competitive market.
Read moreFinance as a Service (FaaS) is a model where business outsource finance function like accounting, tax, payroll, and cash flow management to external providers.
Read moreFinancial accounting focuses on recording, summarizing, and reporting a company’s financial transactions following accounting standards like GAAP or IFRS.
Read moreA financial controller manages company’s accounting operations, ensures accuracy in financial records, & oversees compliance with tax & regulatory requirements
Read moreFinancial forecasts predict a company’s future financial outcomes based on historical data, market trends, operational plans, and key assumptions.
Read moreFinancial instruments are contractual agreements that represent monetary value and can be traded in financial markets.
Read moreFinancial operations (FinOps) refers to the integrated systems, processes, and teams that manage a company’s daily financial activities.
Read moreFinancial projections are estimates based on scenarios to assess the viability of business strategies, product launches, or investment decisions.
Read moreFinancial reporting is the structured communication of an organization’s financial performance and position through formal financial statements and disclosures.
Read moreFinancial statements are formal records that present an organization’s financial performance, cash flows, and financial position over a specific period.
Read moreA fiscal year is a 12-month accounting period used for financial reporting and taxes, often differing from the calendar year to align with business cycles.
Read moreA Fixed Asset is a long-term tangible asset used in operations to generate income, not expected to be sold or used up within a year.
Read moreFollow-On Funding, or a subsequent financing round, refers to additional capital raised by a startup after its initial funding round, such as Seed or Series A.
Read moreForecasts in finance predict a company’s future performance using past data, market trends, budgets, and strategic plans.
Read moreA Founder is an individual or group of individuals who conceive, establish, and launch a business venture.
Read moreA Fractional CFO (Chief Financial Officer) is a seasoned financial executive who works with a company on a part-time, project-based, or interim basis.
Read moreFree Cash Flow (FCF) is the cash generated from a company's operations after deducting capital expenditures (CapEx) needed to maintain or expand its assets.
Read moreA Full-Time Employee (FTE) works a standard schedule, usually 35 to 40 hours per week, as defined by an organization or regulatory framework.
Read moreA Funding Gap refers to the shortfall between a company’s available financial resources and its projected financial requirements over a defined period.
Read moreA funding round is a structured process where a business raises capital from external investors to support its growth, operations, or product development.
Read moreFundraising in startups and corporate finance is securing capital from investors, banks, or institutions to support operations, development, expansion, or M\&A.
Read moreGenerally Accepted Accounting Principles (GAAP) are standardized rules and procedures used for financial reporting in the U.S.
Read moreA General Ledger (GL) is the primary accounting record that tracks all financial transactions across assets, liabilities, equity, revenues, and expenses.
Read moreA Go-to-Market (GTM) strategy is a structured plan detailing how a business will launch a product, acquire customers, and gain a competitive edge.
Read moreGoing concern is an accounting principle assuming a business will continue operations indefinitely without plans to liquidate or reduce activities.
Read moreGoodwill represents the intangible value of a business beyond its identifiable net assets.
Read moreGross Burn Rate represents the total operating expenses a company incurs in a given month before considering revenue inflows.
Read moreGross Income is a company’s total revenue from core business activities before deducting expenses like operating costs, taxes, and interest.
Read moreGross Margin is a profitability ratio indicating the percentage of revenue retained after subtracting the cost of goods sold (COGS).
Read moreGross Merchandise Value (GMV) is the value of goods or services sold on a marketplace or e-commerce platform, before deductions like fees, taxes, or returns.
Read moreGross Profit represents the revenue remaining after subtracting the direct costs associated with producing goods or delivering services (COGS).
Read moreGross Profit Margin shows the percentage of revenue that exceeds production costs, indicating how much a company retains per dollar of sales.
Read moreGross Retention measures the percentage of recurring revenue kept from existing customers, excluding expansion but including downgrades and churn.
Read moreGrowth Capital is funding raised to accelerate expansion, fund acquisitions, or boost production, without giving up control to investors.
Read moreGrowth hacking uses data and creative, low-cost methods to quickly test and scale customer acquisition and retention.
Read moreAn in-kind contribution is a non-cash donation of goods, services, time, or property to a business or project, instead of direct money.
Read moreIncentive Stock Options (ISOs) are a type of equity compensation commonly offered to employees, particularly in startups and growth-stage companies.
Read moreAn Income Statement summarizes a company’s revenues, expenses, and profits or losses over a specific period to show financial performance.
Read moreA business incubator supports early-stage companies by providing resources, mentorship, office space, networking, and sometimes seed capital to help them grow.
Read moreAn Independent Contractor is a self-employed individual or entity contracted to provide services to a company without being formally employed.
Read moreAn Initial Public Offering (IPO) is when a private company offers its shares to the public for the first time by listing them on a stock exchange.
Read moreInterest is the cost of borrowing funds or the return on invested capital, compensating for the risk and opportunity cost of lending money.
Read moreThe Interest Coverage Ratio (ICR) measures a company’s ability to pay interest on its outstanding debt using its operating income.
Read moreInterest rates are the cost of borrowing or the return on savings, usually shown as an annual percentage of the principal amount.
Read moreInventory Turnover measures how efficiently a business manages its stock by calculating how many times inventory is sold and replaced during a period.
Read moreAn Investment Memo is a comprehensive document prepared by investors or venture capitalists evaluating a potential investment opportunity.
Read moreAn Investment Round is a stage-specific fundraising event where startups raise capital from external investors in exchange for equity or convertible debt.
Read moreInvestments refer to the allocation of capital into assets, securities, businesses, or projects with the expectation of generating returns over time.
Read moreAn invoice is a formal document from a seller to a buyer, detailing goods/services, quantities, prices, payment terms, and due dates.
Read moreInvoice factoring is when a business sells its outstanding invoices to a factoring company at a discount for immediate cash, improving cash flow.
Read moreInvoice Reconciliation involves verifying that invoices received from suppliers or sent to customers match purchase orders, delivery notes, and payment records.
Read moreA Key Performance Indicator (KPI) is a measurable value that demonstrates how effectively a company is achieving its key business objectives.
Read moreLast Twelve Months (LTM) refers to the most recent 12-month period used in financial analysis, offering a current view of a company’s performance.
Read moreA Lead Investor is an investor that takes on the role of the primary decision-maker in a funding round.
Read moreA Lean Startup is a methodology focused on creating a minimal viable product (MVP) to test assumptions and gather early customer feedback.
Read moreLeverage in financial terms refers to the use of borrowed capital (debt) to increase the potential return on investment.
Read moreLifetime Value (LTV) refers to the total revenue a business expects to earn from a customer throughout their relationship.
Read moreThe Lifetime Value (LTV) ratio compares the total value a customer brings to a business over their lifetime with the cost of acquiring that customer (CAC).
Read moreA Limited Liability Company (LLC) is a business structure that protects owners' personal liability while offering operational flexibility.
Read moreLiquidity refers to how easily an asset can be converted into cash without affecting its price.
Read moreA Liquidity Event refers to a financial occurrence where a company’s shareholders or owners can convert their equity into cash.
Read moreLiquidity Preference refers to the order of payments or claims made to investors or stakeholders in the event of a company’s liquidation or sale.
Read moreLocal Tax refers to taxes imposed by municipal or regional authorities within a specific locality, as opposed to national taxes.
Read moreA lock-up period is a restriction after an IPO that prevents shareholders from selling their shares for a set time, usually 90 to 180 days.
Read moreThe Magic Number is a metric for SaaS companies that measures sales efficiency, showing the relationship between sales/marketing costs and resulting revenue.
Read moreManagerial Accounting uses financial data to support internal decision-making, helping management control costs, plan activities, and make strategic decisions.
Read moreMarginal Cost is the additional cost incurred to produce one more unit of a product or service.
Read moreMarginal revenue is the additional revenue from selling one more unit of a product or service, used to assess the impact of increased sales on total revenue.
Read moreMarket Capitalization (Market Cap) is a measure of the total market value of a company's outstanding shares.
Read moreMarket Sizing Analysis is the process of estimating the total potential size of a market for a specific product or service.
Read moreMarket Traction refers to the measurable progress a business has made in gaining customers, users, or sales over a given period.
Read moreMarkup is the amount added to a product's cost to determine its selling price, ensuring the business generates a profit.
Read moreA Material Adverse Change (MAC) clause in contracts covers major changes that impact a party’s ability to meet obligations, common in M\&A or loan deals.
Read moreMaterial Procurement refers to the process of sourcing, acquiring, and managing raw materials and goods that are necessary for production.
Read moreMergers and Acquisitions (M&A) refer to the processes by which companies combine (merger) or one company acquires another (acquisition).
Read moreMezzanine Financing is a form of capital that blends debt and equity financing, typically used by companies in the growth or expansion stage.
Read moreMicrolending is the provision of small loans to individuals or businesses lacking access to traditional banking services.
Read moreMVP refers to the most basic version of a product that can be released to the market to validate hypotheses, gather user feedback, and test key assumptions.
Read moreMonth Over Month (MoM) is a metric used to compare data points, such as sales, revenue, or active users, from one month to the next.
Read moreMonthly Recurring Revenue (MRR) is a key metric for SaaS and subscription-based businesses, measuring the predictable, recurring revenue generated each month.
Read moreA Negative Pledge on IP is a loan clause where the borrower agrees not to pledge, sell, or encumber their intellectual property without the lender's consent.
Read moreNet Dollar Retention (NDR) measures revenue growth or contraction from existing customers in SaaS and subscription-based businesses over a set period.
Read moreNet expansion measures revenue growth or contraction from existing customers, factoring in churn, upsells, cross-sells, and new purchases over a specific period
Read moreNet Income is a company’s total earnings or profit, calculated by subtracting all expenses, taxes, interest, and costs from total revenue.
Read moreNet Operating Income (NOI) is a key performance metric used in real estate and property investment.
Read moreNet Present Value (NPV) measures investment profitability by calculating the difference between present value of cash inflows and outflows over time.
Read moreThe Net Promoter Score (NPS) gauges customer loyalty by asking how likely customers are to recommend a company’s products, on a scale from 0 to 10.
Read moreNet worth is the total value of assets minus liabilities, reflecting an individual’s or business’s financial health and what remains after debts are subtracted.
Read moreA Non-Compete Agreement bars an employee from joining competitors or starting a similar business for a set time after leaving the company.
Read moreNon-Dilutive Funding refers to capital raised by a business without giving up equity ownership.
Read moreA Non-Disclosure Agreement (NDA) is a legal contract that restricts one party from sharing confidential information during business discussions or partnerships.
Read moreA Non-Liquid Asset refers to an asset that cannot be quickly converted into cash or a cash-equivalent without significant loss of value.
Read moreA Non-Qualified Stock Option (NQSO) is an employee stock option that doesn’t meet the criteria for special tax treatment under the Internal Revenue Code (IRC).
Read moreThe North Star Metric (NSM) is a key performance indicator (KPI) that helps startups and growth-stage companies measure long-term success and business health.
Read moreObjectives and Key Results (OKR) is a goal-setting framework used by organizations to define measurable goals and track progress toward outcomes.
Read moreIn a business, Officers are individuals appointed by the board of directors to manage and execute the company’s day-to-day operations.
Read moreAn Operating Budget is a financial plan that outlines expected revenue and operating expenses over a specific period, typically a fiscal year.
Read moreOperating Cash Flow (OCF) is the cash generated from a company's core business operations, excluding investment and financing activities.
Read moreOperating Income, also known as Operating Profit, is a company’s profit earned from its core business operations, excluding deductions of interest and taxes.
Read moreOperating Leverage refers to the extent to which a company can increase operating income by increasing revenue.
Read moreOperating margin is a profitability ratio that shows the percentage of revenue remaining after covering operating expenses, before interest and taxes.
Read moreAn Option Pool is a portion of a company’s shares reserved for future issuance to employees, advisors, and board members as part of stock compensation plans.
Read moreOutsourced bookkeeping involves hiring a third-party service to manage a company’s financial records, including transactions and bank statement reconciliation.
Read moreAn Outsourced CFO is a part-time or contract financial expert who provides strategic financial leadership without the cost of a full-time executive.
Read moreAn Outsourced Controller is a contracted expert managing a company’s accounting, financial reporting, controls, and compliance functions.
Read moreOverhead refers to the ongoing, indirect costs required to run a business that are not directly tied to producing a product or service.
Read moreOverhead Costs are the indirect, ongoing expenses associated with running a business but not directly tied to revenue generation.
Read moreP&L Management involves overseeing a company’s Profit and Loss statement, tracking revenues, costs, and expenses over specific period like monthly or quarterly.
Read moreA Partnership is a business arrangement where two or more parties share ownership, responsibilities, profits, and liabilities of a venture.
Read morePay-to-play is a venture capital provision requiring existing investors to participate in future funding rounds to maintain privileges like anti-dilution rights
Read moreAccounts Payable Financing lets a lender pay a company’s suppliers at a discount, giving the company longer to repay under extended payment terms.
Read moreThe Payback Period measures how long it takes for an investment to recoup its initial cost through generated cash flows.
Read moreThe Payout Ratio measures the proportion of a company’s earnings paid out to shareholders in the form of dividends.
Read moreA Payroll System is a structured software or service designed to manage the calculation, distribution, and reporting of employee compensation.
Read morePayroll Tax is a mandatory tax imposed on employers and employees, based on employee wages and salaries.
Read moreA Professional Employer Organization (PEO) provides HR services to small and medium-sized businesses through a co-employment arrangement.
Read morePetty Cash is a small amount of physical cash kept by a business for minor expenses that can't be paid through formal payment methods.
Read moreA pitch deck is a brief visual presentation startups use to show their business model, product, market, financials, and funding needs to potential investors.
Read moreA Portfolio Company is a business entity in which a venture capital firm, private equity firm, or other investment entity holds an equity stake.
Read morePositive Pay helps prevent fraud by letting banks verify issued checks using a list of check numbers, amounts, and payees from the business.
Read moreA Post-Money Valuation is the estimated value of a company immediately after receiving external funding or capital injection.
Read moreA Pre-Money Valuation is the estimated market value of a company immediately before it receives new external funding.
Read morePre-Seed Funding is the earliest external investment a startup receives, often from angel investors, friends and family, or early-stage venture funds.
Read moreA Preferred Return is a guaranteed minimum rate of return promised to certain classes of investors, often preferred shareholders.
Read morePreferred stock is a type of equity that has priority over common stock in dividend payments and asset distribution during liquidation.
Read morePresent Value (PV) calculates the current worth of future cash flows, discounted at a specific interest or discount rate.
Read morePrimary Shares refer to new shares issued directly by a company to raise additional capital.
Read morePrivate Equity (PE) involves investing in privately held companies through direct equity, buyouts, or strategic funding rounds, outside public stock exchanges.
Read moreThe Private Equity (P/E) Ratio is a valuation multiple that compares a company’s market value to its earnings.
Read moreA Private Placement is a fundraising method where securities are sold directly to a limited number of accredited investors.
Read morePro Rata is a Latin term meaning "in proportion." In finance and legal agreements, pro rata rights or calculations refer to the proportional allocation.
Read moreProcure to Pay (P2P) is the end-to-end process of purchasing goods or services from suppliers and processing payments for them.
Read moreProduct Development is the process of ideating, designing, building, testing, and launching a product or service to meet market needs or business opportunities.
Read moreProduct velocity is the speed and efficiency at which a team delivers new features, updates, or improvements over a set period.
Read moreProduct-Market Fit (PMF) is when a product or service meets strong market demand, shown by consistent customer adoption, retention, and revenue growth.
Read moreProfit is the financial gain a business achieves when its total revenue exceeds its total expenses, taxes, and costs over a specific period.
Read moreThe Profit and Loss (P&L) Statement, or Income Statement, summarizes a company’s revenues, expenses, and profits or losses over a specific period.
Read moreProgrammatic Funding is a structured approach to allocating financial resources to specific programs or projects within an organization or portfolio.
Read moreQualified Small Business Stock (QSBS) is a stock type offering major tax benefits to investors under Section 1202 of the U.S. Internal Revenue Code.
Read moreThe Quick Ratio (Acid-Test Ratio) measures a company’s ability to cover short-term liabilities with its most liquid assets.
Read moreRamp time is the period it takes for a new employee, especially in sales, to reach full productivity or meet performance targets.
Read moreRecurring Revenue is the portion of a business’s revenue that is expected to continue in the future on a regular, predictable basis.
Read moreA lock-up period is a restriction after an IPO that prevents shareholders from selling their shares for a set time, usually 90 to 180 days.
Read moreRefund Accounting involves the recording and financial treatment of returned payments or product refunds in a company’s books.
Read moreA Registered Investment Advisor (RIA) is a firm or individual offering financial advice and investment management while adhering to fiduciary standards.
Read moreRepeat Customer Rate measures the percentage of customers who make multiple purchases from a business within a given timeframe.
Read moreThe R&D Tax Credit lowers taxes for businesses investing in innovation, product development, and process improvements.
Read moreRetained earnings are a company’s cumulative net income kept in the business instead of being paid out as dividends to shareholders.
Read moreRetention refers to a company's ability to keep existing customers, employees, or clients over a specified period.
Read moreReturn on Assets (ROA) measures a company's ability to generate profit relative to its total assets.
Read moreReturn on Capital Employed (ROCE) is a profitability ratio that measures how efficiently a company uses its capital (debt and equity) to generate profits.
Read moreReturn on Equity (ROE) measures a company’s ability to generate net profits from shareholders’ equity.
Read moreReturn on Invested Capital (ROIC) measures the return generated by a company on the capital invested by both shareholders and debt holders.
Read moreReturn on Investment (ROI) is one of the most essential financial metrics used to measure the efficiency or profitability of an investment.
Read moreReturn on Revenue (RoR), also known as Net Profit Margin, assesses how much profit a company generates for every unit of revenue earned.
Read moreRevenue is the total income generated by a business from its primary operations, typically through the sale of goods or services, before deducting any expenses.
Read moreA Revenue Forecast is a financial projection that estimates a company’s future revenue over a specified period, typically monthly, quarterly, or annually.
Read moreRevenue Recognition is an accounting principle that dictates when and how a business should record its earned revenue.
Read moreA Revenue Run Rate is a financial metric used to estimate the company’s future revenue based on current financial performance.
Read moreA Right of First Refusal (ROFR) gives existing stakeholders the option to buy an asset or equity before it's offered to outside parties.
Read moreRisk Capital refers to the funds invested in high-risk, high-reward ventures such as startups, early-stage companies, or speculative investments.
Read moreA Roll-Up Vehicle (RUV) pools investors into one entity, usually an SPV, to collectively invest in a target company.
Read moreA Rolling Budget adds a new period as one ends, keeping a continuous 12-month (or similar) budget plan to ensure ongoing financial planning.
Read moreA Rolling Forecast is a continuous financial projection that extends beyond the traditional fiscal year-end.
Read moreA Round of Funding is a stage in which a company raises capital from external investors to support its growth, operations, or strategic initiatives.
Read moreA run rate is a financial projection that estimates future performance by annualizing revenue or profit figures from a shorter period, like monthly or quarterly
Read moreRunway is a metric that indicates how long a company can continue operating at its current burn rate before it runs out of cash.
Read moreAn S Corporation (S Corp) is a type of corporation that passes income, losses, deductions, and credits to shareholders for federal tax purposes.
Read moreAn S-Corp Election is when a qualifying corporation opts to be taxed as an S Corporation by filing Form 2553 with the IRS.
Read moreSoftware as a Service (SaaS) is cloud-hosted software delivered online via subscription, allowing users to access applications without local installation.
Read moreSaaS Churn refers to the percentage of customers who cancel their subscription or stop using a SaaS product within a given period.
Read moreSaaS Metrics are KPIs used to measure the financial health, growth, and performance of Software as a Service (SaaS) businesses.
Read moreA SAFE (Simple Agreement for Future Equity) Note is a financing contract used by startups to raise early-stage capital without immediately setting a valuation.
Read moreSales and Marketing Efficiency measures how effectively a business converts its sales and marketing investments into revenue.
Read moreA Sales Pipeline is a visual or digital representation of the stages a prospective customer goes through before making a purchase.
Read moreSales Tax is a consumption-based tax imposed by governments on the sale of goods and services.
Read moreSales Tax Filing is the process of reporting and remitting the sales taxes a business collects from customers to the appropriate tax authorities.
Read moreThe Secondary Market is where previously issued securities, like stocks and bonds, are bought and sold between investors.
Read moreSecondary shares are existing company shares sold by current shareholders (e.g., founders, employees, early investors) rather than newly issued shares.
Read moreSection 382 of the U.S. IRC limits a company's ability to use tax loss carryforwards after a significant change in ownership.
Read moreA Secured Loan is a type of loan backed by collateral — a valuable asset such as real estate, equipment, accounts receivable, or inventory.
Read moreSeed Capital is the initial funding for a new business, usually provided by founders, family, friends, or angel investors, to cover early-stage expenses.
Read moreSeed funding is an early fundraising round where a startup raises capital to support product development, market research, hiring, and go-to-market efforts.
Read moreA Seed Round is the first significant round of equity financing for a startup, often following informal seed capital.
Read moreSeries A Funding is the first round of institutional venture capital financing for a startup after the seed round.
Read moreSeries B Funding is a venture capital round for startups with strong product-market fit, revenue growth, and market traction, aimed at scaling operations.
Read moreSeries C Funding is a later-stage investment round for companies aiming to scale, expand, or prepare for an IPO or acquisition.
Read moreServiceable Available Market (SAM) refers to the segment of the Total Addressable Market (TAM) that a business’s products or services can specifically serve.
Read moreServiceable Obtainable Market (SOM) is the portion of the Serviceable Available Market (SAM) that a business can realistically capture in the near term.
Read moreShareholder Voting Rights are the rights granted to a company’s shareholders to vote on key corporate matters.
Read moreShareholder's Equity is the value remaining in a company after subtracting its liabilities from its assets, representing the owners' stake in the company.
Read moreA Shareholders’ Agreement is a legally binding contract between a company’s shareholders that outlines their rights, responsibilities, and obligations.
Read moreShort Term Debt refers to any financial obligations a company must repay within one year from the balance sheet date.
Read moreShort-Term Investments are financial assets that a company intends to convert into cash within a year.
Read moreA Simple Agreement for Future Equity (SAFE) is an investment contract between a startup and an investor.
Read moreSingle-Entry Bookkeeping is a basic accounting method where each transaction is recorded once, as income or expense, usually in a cash book or journal.
Read moreSingle-Trigger Acceleration is a clause that accelerates the vesting of unvested stock options upon the occurrence of a single predefined event.
Read moreA Solvency Ratio measures a company’s ability to meet its long-term financial obligations and continue operations into the foreseeable future.
Read moreA Special Purpose Vehicle (SPV) is a legal entity created for a specific purpose, often to limit financial risk or pool capital for a targeted investment deal.
Read moreStartup accelerators help startups grow quickly through funding, mentorship, and networking. This guide explores what they are and how they work.
Read moreBootstrapping refers to the process of starting and growing a business without external funding.
Read moreThe startup ecosystem is a network of individuals, organizations, resources, and services that support the creation, growth, and scaling of startups.
Read moreStartup incubation is a structured program that helps early-stage startups refine ideas, build prototypes, develop business models, and prepare for market entry
Read moreState Tax is a tax levied by individual state governments on businesses and residents operating within their jurisdiction.
Read moreThe Statement of Cash Flows is one of the core financial statements of a business, showing the inflows and outflows of cash during a specific accounting period.
Read moreA statutory audit is a mandatory review of a company’s financials to ensure accuracy, compliance with accounting standards, and adherence to regulations.
Read moreStock Options allow individuals to buy company shares at a set price within a specific period, often used to reward employees or attract investors.
Read moreA Stock Warrant is a financial instrument granting the holder the right to buy a company’s stock at a specific price before a set expiration date.
Read moreStrategic Finance uses financial planning, analysis, and data-driven decisions to align a company’s financial operations with its long-term goals.
Read moreA strategic investor provides capital to a startup for both financial return and strategic benefits, such as market expansion or technology access.
Read moreA Subscription Model is a recurring revenue model where customers pay a fixed, regular fee for continuous access to a product or service.
Read moreThe Sunk Cost Fallacy is a bias where decisions are influenced by past investments of time or money, rather than future benefits or outcomes.
Read moreSupply Chain Financing lets businesses extend supplier payments while enabling early payouts via a financial intermediary, improving cash flow.
Read moreSweat equity is the non-cash investment of time, effort, and skills by founders or employees in exchange for equity ownership.
Read moreA Syndicate is a group of investors who collectively invest in a startup or venture capital deal.
Read moreA Target Company refers to a firm that is the subject of an acquisition attempt by another entity, known as the acquirer.
Read moreA Tax Allowance is a portion of income that is exempt from taxation, reducing the total taxable income.
Read moreA Tax Bracket defines the range of income taxed at a specific rate, forming the basis of a progressive tax system.
Read moreA Tax Credit is a direct reduction of the tax owed, offering a dollar-for-dollar decrease in tax liability.
Read moreA Tax Deduction reduces taxable income, thereby lowering the overall tax liability.
Read moreA tax nexus is the connection between a business and a taxing jurisdiction, requiring the business to collect and remit taxes in that area.
Read moreTaxable income is the income subject to taxation after deductions, exemptions, and allowances are applied, forming the basis for calculating tax liability.
Read moreTaxes are compulsory financial charges imposed by a government on individuals, businesses, or transactions to fund public services and infrastructure.
Read moreA term sheet is a non-binding document that outlines the fundamental terms and conditions of a potential investment agreement between a startup and an investor.
Read moreTerm sheet negotiation is the discussion between founders and investors to agree on key investment terms before drafting final, legally binding agreements.
Read moreThird-Party Logistics (3PL) refers to the outsourcing of logistics and supply chain management operations.
Read moreTop-line growth refers to an increase in a company’s gross revenue or sales before deducting any expenses.
Read moreTotal Addressable Market (TAM) is the total revenue opportunity available for a product or service if it captured 100% market share within a specific segment.
Read moreTrailing Twelve Months (TTM) refers to a financial performance metric that aggregates a company’s financial data over the past 12 consecutive months.
Read moreTransactional funding is a short-term, bridge financing arrangement used in fast-paced transactions like real estate wholesale deals, mergers, or trade finance.
Read moreUnderwriting is the process where financial institutions assess the risk of an investment, loan, or insurance policy before approval.
Read moreA Unique Selling Proposition (USP) is the key feature or benefit of a product, service, or brand that sets it apart from competitors and adds value.
Read moreValuation is the analytical process of determining the current or projected worth of an asset, business, or investment.
Read moreA Value Proposition is a clear, concise statement that describes the unique value a product or service delivers to customers.
Read moreVariable costs are business expenses that fluctuate with production or sales volume, such as raw materials, packaging, and commissions.
Read moreA Variable Interest Entity (VIE) is a business structure where an investor controls the entity through contractual agreements, not direct equity ownership.
Read moreA Variance Report compares planned financial outcomes (budgeted figures) with actual results, highlighting deviations (variances).
Read moreVenture Capital (VC) is private equity funding for early-stage startups and small businesses with high growth potential.
Read moreA VC Associate sources, evaluates, and supports startup investments, managing due diligence, market research, and portfolio to identify growth opportunities.
Read moreVenture Capital Fund Reserves are a portion of a fund’s capital set aside for follow-on investments in existing portfolio companies.
Read moreA Venture Capital Partner is a senior executive in a venture capital firm, responsible for making key investment decisions and managing operations.
Read moreA Venture Capital Principal occupies a mid-to-senior investment role, bridging the gap between Associates and Partners.
Read moreVenture debt is financing option for early-stage startups, offering loans to companies with equity backing but no profitability or assets for traditional loans
Read moreVesting Acceleration speeds up the vesting of unvested equity based on specific events defined in stock option or equity grant agreements.
Read moreViral growth is rapid, exponential growth driven by word-of-mouth and referrals, without a matching increase in marketing costs.
Read moreA Warrant is a financial instrument giving the holder the right, but not the obligation, to buy a company's stock at a specific price within a set timeframe.
Read moreThe Weighted Average Cost of Capital (WACC) is a company's average cost of capital from debt, equity, and preferred stock, weighted by their capital structure.
Read moreWorking Capital is a financial metric that represents the difference between a company’s current assets and current liabilities.
Read moreA Working Capital Loan is short-term funding that helps businesses cover daily expenses like payroll, rent, inventory, and accounts payable.
Read moreWorking capital management is the strategic handling of short-term assets and liabilities to ensure liquidity for operations while optimizing profitability.
Read moreYear to Date (YTD) is a financial metric that measures performance or results from the start of the current calendar or fiscal year to the present date.
Read moreYear-Over-Year (YOY) compares a metric (e.g., revenue, profit) for a specific period to the same period in the previous year to assess growth or trends.
Read moreYield is the income return from an investment, expressed as an annual percentage of its cost, market value, or face value.
Read moreA Zombie Company is a financially distressed business that continues to operate despite being unable to cover its debt interest payments from operating profits.
Read moreZombie Spend refers to unnoticed, recurring, or unnecessary business expenses that continue without proper oversight or scrutiny.
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