409A Valuation

A 409A valuation is an independent assessment of a startup's fair market value, crucial for equity compensation, tax implications, and regulatory compliance.

83(b) Election

The 83(b) election lets startup founders or employees pay taxes on equity early, potentially saving thousands if made at the right time.

Accounting Equation

The accounting equation (Assets = Liabilities + Equity) is the foundation of double-entry bookkeeping, crucial for financial reporting and analysis.

Accounting Software

Modern accounting software has evolved beyond basic bookkeeping to include advanced features like cash flow forecasting, inventory management, project tracking, and business intelligence capabilities.

Accounts Payable

Accounts Payable (AP) represents the short-term liabilities a business owes to its suppliers for goods or services received but not yet paid for.

Accounts Receivable (AR)

Accounts Receivable (AR) represents money owed to a business by its customers for goods or services delivered on credit.

Accounts Receivable Loans

Accounts Receivable Loans are short-term financing options where businesses use their unpaid customer invoices as collateral to secure immediate funds.

Accredited Investor

An Accredited Investor is an individual or institution permitted to invest in private, high-risk securities not registered with financial regulators.

Accrual Accounting

Accrual Accounting records revenues and expenses when they are earned or incurred, not when cash is received or paid.

Accrued Expenses

Accrued Expenses are expenses a business has incurred but has not yet paid or received an invoice for by the end of an accounting period.

Accrued Interest

Accrued 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.

Acquihire

An acquihire is an acquisition strategy focused on acquiring a company's talent rather than its product, technology, or customer base.

Acquisition

An Acquisition is a corporate strategy where one company purchases most or all of another company’s shares or assets to gain control of it.

Activity-Based Budgeting (ABB)

Activity-Based Budgeting (ABB) is a budgeting method that focuses on identifying and analyzing business activities that drive costs.

Adjusted Gross Income (AGI)

Adjusted Gross Income (AGI) is an individual’s total gross income from all taxable sources, minus specific deductions allowed by tax authorities.

Advisory Shares

Advisory Shares are equity given to company advisors, usually in startups, as compensation for their expertise, connections, or strategic input.

Allocation

An Allocation is the process of distributing financial resources, costs, or profits across departments, projects, or investment categories in an organization.

Alternative Financing

Alternative Financing refers to non-traditional funding options outside of conventional bank loans or public stock issuance.

Amortization

Amortization is the systematic process of gradually reducing a debt or the value of an intangible asset over a specific period.

Angel Investor

An Angel Investor is a high-net-worth individual who provides capital to early-stage startups in exchange for equity ownership or convertible debt.

Angel Round

It is a startup's first formal fundraising round, where capital is raised from angel investors to fund product development, market entry, and operations.

Annual Contract Value (ACV)

Annual Contract Value (ACV) measures the average annualized revenue from a single customer contract, excluding one-time fees or variable charges.

Annual Percentage Yield (APY)

Annual Percentage Yield (APY) is the real annual return on a deposit or investment, factoring in the effects of compounding interest.

Annual Recurring Revenue (ARR)

Annual Recurring Revenue (ARR) is the predictable revenue a subscription-based business expects to earn annually from active contracts or subscriptions.

Anti-Dilution Clause

An Anti-Dilution Clause protects existing investors from equity dilution caused by future share issuances at lower prices.

Anti-Dilution Ratchets

Anti-Dilution Ratchets are clause that protect early investors from dilution if a company issues new shares at a lower valuation than their original investment.

Asset

An Asset is any resource owned or controlled by a business or individual that holds current or future economic value.

Asset Financing

Asset Financing involves securing loans or credit by using a company’s assets, like inventory, accounts receivable, equipment, or property, as collateral.

Asset Turnover Ratio

The Asset Turnover Ratio is a financial efficiency metric that measures how effectively a company uses its assets to generate revenue.

Audit

An audit independently verifies a company's financial records for accuracy and compliance. It can be internal or external.

Average Revenue Per User (ARPU)

Average Revenue Per User (ARPU) measures the average revenue generated per customer over a period, commonly used by subscription and platform businesses.

B Corporation

A B Corporation is a for-profit company certified to meet rigorous standards of social and environmental performance, accountability, and transparency.

Balance Sheet

A Balance Sheet is a financial statement that provides a snapshot of a company's financial position at a specific point in time.

Balance Sheet Financing

Balance Sheet Financing is a funding strategy where a company secures capital based on the strength and assets reported on its balance sheet.

Bank Reconciliation

Bank reconciliation compares a company's internal financial records with bank statements to ensure both sets of records match.

Basis Point

A Basis Point (often abbreviated as "bp" or "bps") is a unit of measurement equal to 1/100th of 1 percent (0.01%).

Billings

Billings refers to the total value of invoices issued by a company to its customers for goods delivered or services rendered during a specific period.

Board Director

A Board Director is a member of a company's Board of Directors, overseeing activities, making major decisions, and representing shareholders' interests.

Bookings

Bookings refers to the total value of contracts or orders received and confirmed by a company during a specific period.

Bootstrap Funding

Bootstrap Funding is when entrepreneurs grow a business using personal savings and revenue, with little or no outside investment.

Bootstrapping

Bootstrapping is starting and growing a business without external funding, using personal savings, reinvested profits, or operational revenue instead.

Bottom Line

Bottom 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.

Break-even Points (BEPs)

Break-even points (BEPs) are the levels where a business’s total revenue equals its total costs, resulting in neither profit nor loss.

Bridge Loan

A bridge loan is a short-term financing tool that provides immediate capital while a borrower secures longer-term funding or waits for cash inflows.

Budget Forecasting

Budget forecasting is the process of estimating future revenues, expenses, and cash flow over a specific time period, typically monthly, quarterly, or annually.

Budget Variance Analysis

Budget variance analysis is the process of comparing a company’s projected budget against actual results to identify where and why deviations occurred.

Burn Multiple

Burn 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.

Burn Rate

Burn rate is the rate at which a company spends its available capital or cash reserves to cover operating expenses, typically expressed monthly.

Business Expenses

Business expenses are operational costs incurred during daily activities, typically tax-deductible, recorded to assess profitability and manage budgets.

Business Incubator

A business incubator supports early-stage startups by providing resources, mentorship, infrastructure, and networking to help them grow and succeed.

Business Model

A Business Model is a strategic plan showing how a company creates, delivers, and captures value through operations, revenue, customer service, and profits.

Buy Now, Pay Later (BNPL)

Buy Now, Pay Later (BNPL) lets customers buy products or services instantly and pay over time, often in interest-free installments, offering flexible financing.

C Corporation (C Corp)

A C Corporation (C Corp) is a legal business structure where the company is considered a separate taxable entity, distinct from its owners.

Cap Table

A Cap Table (short for Capitalization Table) is a detailed spreadsheet or document that outlines the ownership structure of a company.

Capital

In 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.

Capital Asset Pricing Model (CAPM)

The 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.

Capital Cycle

The Capital Cycle describes the process through which businesses and industries allocate capital, compete for resources, and respond to market profitability.

Capital Employed

Capital employed is the total capital a business uses, combining both equity and debt, to generate profits and fund assets and operations.

Capital Expenditures (CapEx)

Capital Expenditures (CapEx) are funds used by a business to acquire or maintain long-term assets like property, equipment, or technology.

Capital Gains

Capital gains are profits from selling an asset for more than its original purchase price, applying to stocks, real estate, businesses, and other investments.

Carried Interest

Carried Interest is a share of profits paid to fund managers as a reward for generating strong returns, common in private equity and venture capital.

Cash Accounting

Cash accounting records revenues and expenses only when cash is received or paid, unlike accrual accounting, which records them when incurred.

Cash Burn

Cash burn refers to the rate at which a company spends its cash reserves to cover operating expenses before achieving positive cash flow.

Cash Burn Rate

Cash Burn Rate quantifies the amount of cash a company depletes over a specific time period — typically measured monthly.

Cash Conversion Cycle (CCC)

The Cash Conversion Cycle (CCC) measures the time it takes for a business to convert investments in inventory and resources into cash from sales.

Cash Disbursement

A cash disbursement is a business payment using cash, checks, or transfers to settle expenses like bills, salaries, or rent.

Cash Flow

Cash 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.

Cash Flow Forecast

A cash flow forecast estimates the money expected to flow in and out of a business over a future period, typically weekly, monthly, or quarterly.

Cash Flow from Operating Activities

Cash Flow from Operating Activities (CFO) measures the cash generated or used by a company’s core operations, cash from investing or financing activities.

Cash Management

Cash management is the process of collecting, handling, and investing cash to maintain liquidity for short-term needs while maximizing returns on idle funds.

Cash Out Date

The 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.

Cash Projection Model

A cash projection model is a financial forecasting tool that estimates future cash inflows and outflows over a defined period — usually 6-12 months.

Cash Zero Date

The 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.

Certified Public Accountant (CPA)

A Certified Public Accountant (CPA) is a licensed financial professional qualified to perform accounting, auditing, tax, and consulting services.

Chart of Accounts (COA)

A Chart of Accounts (COA) is a structured list of all financial accounts in a company’s ledger, used to categorize transactions for accurate reporting.

Chief Financial Officer (CFO)

The Chief Financial Officer (CFO) is a senior executive responsible for managing a company’s financial strategy, reporting, and risk management.

Chief Operating Officer (COO)

The Chief Operating Officer (COO) is the executive responsible for overseeing a company’s day-to-day operational activities.

Churn

Churn refers to the percentage of customers or subscribers who stop doing business with a company over a given period.

Cliff Vesting

Cliff vesting is when an employee must work a set period before any benefits or stock options become vested or claimable.

Cloud Accounting

Cloud accounting is the practice of using online software hosted on remote servers to manage, record, and process a business’s financial transactions.

Cohort Analysis

Cohort analysis groups customers or data points by shared characteristics within a time period, helping businesses observe trends and patterns over time.

Common Stock

Common stock represents ownership in a company, offering voting rights and potential dividends, but ranks below preferred stock in liquidation priority.

Competitive Analysis

Competitive analysis is the process of evaluating the strengths, weaknesses, strategies, and market positions of current and potential business rivals.

Compound Annual Growth Rate (CAGR)

The Compound Annual Growth Rate (CAGR) measures the steady growth rate of investments or financial metrics over time, focusing on its calculation & significance

Compounded Monthly Growth Rate (CMGR)

Compounded Monthly Growth Rate (CMGR) measures the consistent month-over-month growth rate needed to achieve a specific value over a period.

Contra Revenue

Contra revenue reduces a company's total revenue by accounting for discounts, returns, and allowances, helping reflect actual earned income.

Contraction

In business and economic contexts, contraction refers to a decline in economic activity, revenue, or business operations over a period.

Contribution Margin

Contribution margin is the amount left from sales revenue after subtracting variable costs, helping cover fixed costs and generate profit.

Convertible Equity

Convertible 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

Corporate Venture Capital (CVC)

Corporate Venture Capital (CVC) is when a corporation invests in startups, aiming for strategic benefits beyond just financial returns.

Cost of Debt

Cost 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.

Cost of Goods Sold (COGS)

Cost of Goods Sold (COGS) represents the direct costs incurred in producing goods or services sold by a business.

Cost Per Acquisition (CPA)

Cost Per Acquisition (CPA) measures the total marketing and sales spend required to acquire a new customer, subscriber, or lead.

Cost Per Click (CPC)

Cost Per Click (CPC) is an online advertising pricing model where advertisers pay each time a user clicks on their ad.

Cost Structure

A cost structure refers to the categorization and breakdown of all the costs a business incurs to operate, produce goods or services, and generate revenue.

Cram-down Round

A cram-down round is a down financing event where new capital is raised at a much lower valuation, significantly diluting existing shareholders' equity.

Credit Risk

Credit risk is the possibility of a financial loss arising from a borrower's failure to repay a loan or meet contractual obligations.

Cross-Selling

Cross-selling is a sales strategy where a business encourages existing customers to purchase additional, complementary, or related products and services.

Crowdfunding

Crowdfunding is a method of raising small amounts of capital from a large number of individuals, typically via online platforms.

Current Assets

Current assets are assets expected to be converted into cash, sold, or consumed within one year or the business’s operating cycle, whichever is longer.

Current Ratio

Current ratio is a liquidity metric that measures a business’s ability to pay its short-term obligations with its short-term assets.

Customer Acquisition Cost (CAC)

Customer Acquisition Cost (CAC) is the average cost to gain a new customer, including marketing, sales, advertising, and related expenses.

Data Room

A data room is a secure, organized digital or physical space where a company stores critical business, financial, operational, and legal documents.

Days Sales Outstanding (DSO)

Days 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.

Debt Capital

Debt capital is borrowed money used by a company for operations or expansion, requiring repayment with interest, unlike equity capital.

Debt Covenant

A 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.

Debt Financing

Debt financing involves borrowing capital to be repaid with interest over time, through loans, bonds, or credit lines.

Debt Ratio

The 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.

Debt Service Coverage Ratio (DSCR)

DSCR measures a company’s ability to service its debt using its operating income. It reflects how comfortably a business can meet its debt obligations.

Debt-to-Equity Ratio

Debt-to-Equity (D/E) ratio compares a company’s total debt to its shareholder equity. It assesses financial leverage and risk.

Debt-to-Income (DTI) Ratio

Debt-to-Income (DTI) ratio compares monthly debt payments to income, helping lenders evaluate an individual’s or business’s creditworthiness.

Deferred Revenue

Deferred revenue (or unearned revenue) represents payments a company receives for goods or services it has not yet delivered

Depreciation

Depreciation 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.

Digital Wallet

A digital wallet is an electronic system that securely stores payment information, personal credentials, and other sensitive data for financial transactions.

Dilution

Dilution occurs when a company issues additional shares of stock, thereby reducing the ownership percentage of existing shareholders.

Discounted Cash Flow (DCF)

Discounted Cash Flow (DCF) is a valuation method that estimates the present value of a business or investment based on its expected future cash flows.

Dividend

A dividend is a share of company’s profits distributed to shareholders, typically in cash or shares, reflecting company’s financial health and profitability.

Dividend Yield

Dividend Yield measures the annual dividend income an investor receives relative to the market price of a company’s stock.

Doing Business As (DBA)

Doing Business As (DBA) refers to the practice of operating a business under a trade name different from its registered legal name.

Dollar-Based Net Expansion Rate (DBNER)

Dollar-Based Net Expansion Rate (DBNER) measures the percentage change in revenue from existing customers, factoring in upgrades, downgrades, and churn.

Double-Trigger Acceleration

Double-trigger acceleration speeds up vesting in stock agreements when two conditions are met: a company control change and employment termination.

Down Round

A Down Round is a financing event where a company raises capital by issuing new shares at a lower valuation than its previous funding round.

Due Diligence

Due diligence is a detailed review to assess a business’s financial, legal, and operational health before an investment or acquisition.

Earnings Before Interest and Taxes (EBIT)

Earnings Before Interest and Taxes (EBIT) represents a company’s profitability from core operations before deducting interest expenses and income taxes.

Earnings Before Taxes (EBT)

Earnings Before Taxes (EBT) is a profitability measure that shows a company's income after operating expenses and interest, but before income tax deductions.

Earnings Per Share (EPS)

Earnings Per Share (EPS) is a financial metric that indicates the portion of a company’s profit attributable to each outstanding ordinary share.

EBITDA

EBITDA is a measure of a company's operating performance, excluding interest, taxes, depreciation, and amortization.

Economic Order Quantity (EOQ)

Economic Order Quantity (EOQ) is an inventory formula used to determine the optimal order quantity that minimizes total inventory costs.

Enterprise Value (EV)

Enterprise 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.

Entrepreneur in Residence (EIR)

An Entrepreneur in Residence (EIR) is a temporary, typically senior-level role within a venture capital firm, private equity fund, accelerator, or corporation.

Equity

Equity represents ownership in a business, calculated as the difference between a company’s assets and liabilities, reflecting the owners' stake

Equity Capital

Equity capital is funds raised by issuing ownership shares, with no repayment or interest, but involves sharing ownership and profits.

Equity Crowdfunding

Equity Crowdfunding is when startups raise capital from many individual investors online, offering equity shares in return.

Equity Dilution

Equity Dilution occurs when a company issues additional shares, reducing the ownership percentage of existing shareholders.

Equity Stake

An 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

Estimated Tax Payments

Estimated tax payments are advance payments made to tax authorities on income not subject to withholding, like business profits, capital gains, or rental income

ETC Financing

ETC 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.

Exit Strategy

An Exit Strategy is a planned approach for business owners and investors to liquidate their stake in a company, realizing their financial returns.

Expansion

Expansion is the phase where a company scales operations, market reach, or products to increase revenue and market share.

Expense Reimbursement Policy

An Expense Reimbursement Policy outlines the rules, procedures, and limits for employees to claim business-related expenses incurred during work activities.

Expenses

Expenses are the costs a business incurs in its operations to generate revenue.

Factor Rate

A factor rate is a financing pricing model commonly used in merchant cash advances (MCAs) and short-term business funding arrangements.

Fair Market Value (FMV)

Fair Market Value (FMV) is the price at which an asset would be exchanged between a knowledgeable, willing buyer and seller in a competitive market.

Finance as a Service (FaaS)

Finance as a Service (FaaS) is a model where business outsource finance function like accounting, tax, payroll, and cash flow management to external providers.

Financial Accounting

Financial accounting focuses on recording, summarizing, and reporting a company’s financial transactions following accounting standards like GAAP or IFRS.

Financial Controller

A financial controller manages company’s accounting operations, ensures accuracy in financial records, & oversees compliance with tax & regulatory requirements

Financial Forecasts

Financial forecasts predict a company’s future financial outcomes based on historical data, market trends, operational plans, and key assumptions.

Financial Instruments

Financial instruments are contractual agreements that represent monetary value and can be traded in financial markets.

Financial Operations (FinOps)

Financial operations (FinOps) refers to the integrated systems, processes, and teams that manage a company’s daily financial activities.

Financial Projections

Financial projections are estimates based on scenarios to assess the viability of business strategies, product launches, or investment decisions.

Financial Reporting

Financial reporting is the structured communication of an organization’s financial performance and position through formal financial statements and disclosures.

Financial Statements

Financial statements are formal records that present an organization’s financial performance, cash flows, and financial position over a specific period.

Fiscal Year

A 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.

Fixed Asset

A 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.

Follow-On Funding

Follow-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.

Forecasts

Forecasts in finance predict a company’s future performance using past data, market trends, budgets, and strategic plans.

Founder

A Founder is an individual or group of individuals who conceive, establish, and launch a business venture.

Fractional CFO

A Fractional CFO (Chief Financial Officer) is a seasoned financial executive who works with a company on a part-time, project-based, or interim basis.

Free Cash Flow (FCF)

Free Cash Flow (FCF) is the cash generated from a company's operations after deducting capital expenditures (CapEx) needed to maintain or expand its assets.

Full-Time Employee (FTE)

A Full-Time Employee (FTE) works a standard schedule, usually 35 to 40 hours per week, as defined by an organization or regulatory framework.

Funding Gap

A Funding Gap refers to the shortfall between a company’s available financial resources and its projected financial requirements over a defined period.

Funding Round

A funding round is a structured process where a business raises capital from external investors to support its growth, operations, or product development.

Fundraising

Fundraising in startups and corporate finance is securing capital from investors, banks, or institutions to support operations, development, expansion, or M\&A.

GAAP (Generally Accepted Accounting Principles)

Generally Accepted Accounting Principles (GAAP) are standardized rules and procedures used for financial reporting in the U.S.

General Ledger

A General Ledger (GL) is the primary accounting record that tracks all financial transactions across assets, liabilities, equity, revenues, and expenses.

Go-to-Market (GTM)

A Go-to-Market (GTM) strategy is a structured plan detailing how a business will launch a product, acquire customers, and gain a competitive edge.

Going Concern

Going concern is an accounting principle assuming a business will continue operations indefinitely without plans to liquidate or reduce activities.

Goodwill

Goodwill represents the intangible value of a business beyond its identifiable net assets.

Gross Burn Rate

Gross Burn Rate represents the total operating expenses a company incurs in a given month before considering revenue inflows.

Gross Income

Gross Income is a company’s total revenue from core business activities before deducting expenses like operating costs, taxes, and interest.

Gross Margin

Gross Margin is a profitability ratio indicating the percentage of revenue retained after subtracting the cost of goods sold (COGS).

Gross Merchandise Value (GMV)

Gross 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.

Gross Profit

Gross Profit represents the revenue remaining after subtracting the direct costs associated with producing goods or delivering services (COGS).

Gross Profit Margin

Gross Profit Margin shows the percentage of revenue that exceeds production costs, indicating how much a company retains per dollar of sales.

Gross Retention

Gross Retention measures the percentage of recurring revenue kept from existing customers, excluding expansion but including downgrades and churn.

Growth Capital

Growth Capital is funding raised to accelerate expansion, fund acquisitions, or boost production, without giving up control to investors.

Growth Hacking

Growth hacking uses data and creative, low-cost methods to quickly test and scale customer acquisition and retention.

In-Kind Contribution

An in-kind contribution is a non-cash donation of goods, services, time, or property to a business or project, instead of direct money.

Incentive Stock Options (ISO)

Incentive Stock Options (ISOs) are a type of equity compensation commonly offered to employees, particularly in startups and growth-stage companies.

Income Statement

An Income Statement summarizes a company’s revenues, expenses, and profits or losses over a specific period to show financial performance.

Incubator

A business incubator supports early-stage companies by providing resources, mentorship, office space, networking, and sometimes seed capital to help them grow.

Independent Contractor

An Independent Contractor is a self-employed individual or entity contracted to provide services to a company without being formally employed.

Initial Public Offering (IPO)

An 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.

Interest

Interest is the cost of borrowing funds or the return on invested capital, compensating for the risk and opportunity cost of lending money.

Interest Coverage Ratio (ICR)

The Interest Coverage Ratio (ICR) measures a company’s ability to pay interest on its outstanding debt using its operating income.

Interest Rates

Interest rates are the cost of borrowing or the return on savings, usually shown as an annual percentage of the principal amount.

Inventory Turnover

Inventory Turnover measures how efficiently a business manages its stock by calculating how many times inventory is sold and replaced during a period.

Investment Memo

An Investment Memo is a comprehensive document prepared by investors or venture capitalists evaluating a potential investment opportunity.

Investment Round

An Investment Round is a stage-specific fundraising event where startups raise capital from external investors in exchange for equity or convertible debt.

Investments

Investments refer to the allocation of capital into assets, securities, businesses, or projects with the expectation of generating returns over time.

Invoice

An invoice is a formal document from a seller to a buyer, detailing goods/services, quantities, prices, payment terms, and due dates.

Invoice Factoring

Invoice factoring is when a business sells its outstanding invoices to a factoring company at a discount for immediate cash, improving cash flow.

Invoice Reconciliation

Invoice Reconciliation involves verifying that invoices received from suppliers or sent to customers match purchase orders, delivery notes, and payment records.

Key Performance Indicator (KPI)

A Key Performance Indicator (KPI) is a measurable value that demonstrates how effectively a company is achieving its key business objectives.

Last Twelve Months (LTM)

Last Twelve Months (LTM) refers to the most recent 12-month period used in financial analysis, offering a current view of a company’s performance.

Lead Investor

A Lead Investor is an investor that takes on the role of the primary decision-maker in a funding round.

Lean Startup

A Lean Startup is a methodology focused on creating a minimal viable product (MVP) to test assumptions and gather early customer feedback.

Leverage

Leverage in financial terms refers to the use of borrowed capital (debt) to increase the potential return on investment.

Lifetime Value (LTV)

Lifetime Value (LTV) refers to the total revenue a business expects to earn from a customer throughout their relationship.

Lifetime Value (LTV) Ratio

The 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).

Limited Liability Company (LLC)

A Limited Liability Company (LLC) is a business structure that protects owners' personal liability while offering operational flexibility.

Liquidity

Liquidity refers to how easily an asset can be converted into cash without affecting its price.

Liquidity Event

A Liquidity Event refers to a financial occurrence where a company’s shareholders or owners can convert their equity into cash.

Liquidity Preference

Liquidity Preference refers to the order of payments or claims made to investors or stakeholders in the event of a company’s liquidation or sale.

Local Tax

Local Tax refers to taxes imposed by municipal or regional authorities within a specific locality, as opposed to national taxes.

Lock-Up Period

A 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.

Magic Number

The Magic Number is a metric for SaaS companies that measures sales efficiency, showing the relationship between sales/marketing costs and resulting revenue.

Managerial Accounting

Managerial Accounting uses financial data to support internal decision-making, helping management control costs, plan activities, and make strategic decisions.

Marginal Cost

Marginal Cost is the additional cost incurred to produce one more unit of a product or service.

Marginal Revenue

Marginal 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.

Market Cap

Market Capitalization (Market Cap) is a measure of the total market value of a company's outstanding shares.

Market Sizing Analysis

Market Sizing Analysis is the process of estimating the total potential size of a market for a specific product or service.

Market Traction

Market Traction refers to the measurable progress a business has made in gaining customers, users, or sales over a given period.

Markup

Markup is the amount added to a product's cost to determine its selling price, ensuring the business generates a profit.

Material Adverse Change (MAC)

A 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.

Material Procurement

Material Procurement refers to the process of sourcing, acquiring, and managing raw materials and goods that are necessary for production.

Mergers and Acquisitions (M&A)

Mergers and Acquisitions (M&A) refer to the processes by which companies combine (merger) or one company acquires another (acquisition).

Mezzanine Financing

Mezzanine Financing is a form of capital that blends debt and equity financing, typically used by companies in the growth or expansion stage.

Microlending

Microlending is the provision of small loans to individuals or businesses lacking access to traditional banking services.

Minimum Viable Product (MVP)

MVP 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.

Month Over Month (MoM)

Month Over Month (MoM) is a metric used to compare data points, such as sales, revenue, or active users, from one month to the next.

Monthly Recurring Revenue (MRR)

Monthly Recurring Revenue (MRR) is a key metric for SaaS and subscription-based businesses, measuring the predictable, recurring revenue generated each month.

Negative Pledge on IP

A 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.

Net Dollar Retention (NDR)

Net Dollar Retention (NDR) measures revenue growth or contraction from existing customers in SaaS and subscription-based businesses over a set period.

Net Expansion

Net expansion measures revenue growth or contraction from existing customers, factoring in churn, upsells, cross-sells, and new purchases over a specific period

Net Income

Net Income is a company’s total earnings or profit, calculated by subtracting all expenses, taxes, interest, and costs from total revenue.

Net Operating Income (NOI)

Net Operating Income (NOI) is a key performance metric used in real estate and property investment.

Net Present Value (NPV)

Net Present Value (NPV) measures investment profitability by calculating the difference between present value of cash inflows and outflows over time.

Net Promoter Score (NPS)

The 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.

Net Worth

Net 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.

Non-Compete Agreement

A Non-Compete Agreement bars an employee from joining competitors or starting a similar business for a set time after leaving the company.

Non-Dilutive Funding

Non-Dilutive Funding refers to capital raised by a business without giving up equity ownership.

Non-Disclosure Agreement (NDA)

A Non-Disclosure Agreement (NDA) is a legal contract that restricts one party from sharing confidential information during business discussions or partnerships.

Non-Liquid Asset

A Non-Liquid Asset refers to an asset that cannot be quickly converted into cash or a cash-equivalent without significant loss of value.

Non-Qualified Stock Option (NQSO)

A 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).

North Star Metric

The North Star Metric (NSM) is a key performance indicator (KPI) that helps startups and growth-stage companies measure long-term success and business health.

Objectives and Key Results (OKR)

Objectives and Key Results (OKR) is a goal-setting framework used by organizations to define measurable goals and track progress toward outcomes.

Officers

In a business, Officers are individuals appointed by the board of directors to manage and execute the company’s day-to-day operations.

Operating Budget

An Operating Budget is a financial plan that outlines expected revenue and operating expenses over a specific period, typically a fiscal year.

Operating Cash Flow (OCF)

Operating Cash Flow (OCF) is the cash generated from a company's core business operations, excluding investment and financing activities.

Operating Income

Operating Income, also known as Operating Profit, is a company’s profit earned from its core business operations, excluding deductions of interest and taxes.

Operating Leverage

Operating Leverage refers to the extent to which a company can increase operating income by increasing revenue.

Operating Margin

Operating margin is a profitability ratio that shows the percentage of revenue remaining after covering operating expenses, before interest and taxes.

Option Pool

An 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.

Outsourced Bookkeeping

Outsourced bookkeeping involves hiring a third-party service to manage a company’s financial records, including transactions and bank statement reconciliation.

Outsourced CFO

An Outsourced CFO is a part-time or contract financial expert who provides strategic financial leadership without the cost of a full-time executive.

Outsourced Controller

An Outsourced Controller is a contracted expert managing a company’s accounting, financial reporting, controls, and compliance functions.

Overhead

Overhead refers to the ongoing, indirect costs required to run a business that are not directly tied to producing a product or service.

Overhead Costs

Overhead Costs are the indirect, ongoing expenses associated with running a business but not directly tied to revenue generation.

P&L Management (Profit and Loss Management) 

P&L Management involves overseeing a company’s Profit and Loss statement, tracking revenues, costs, and expenses over specific period like monthly or quarterly.

Partnership

A Partnership is a business arrangement where two or more parties share ownership, responsibilities, profits, and liabilities of a venture.

Pay to Play 

Pay-to-play is a venture capital provision requiring existing investors to participate in future funding rounds to maintain privileges like anti-dilution rights

Payables Financing

Accounts Payable Financing lets a lender pay a company’s suppliers at a discount, giving the company longer to repay under extended payment terms.

Payback Period 

The Payback Period measures how long it takes for an investment to recoup its initial cost through generated cash flows.

Payout Ratio

The Payout Ratio measures the proportion of a company’s earnings paid out to shareholders in the form of dividends.

Payroll System

A Payroll System is a structured software or service designed to manage the calculation, distribution, and reporting of employee compensation.

Payroll Tax

Payroll Tax is a mandatory tax imposed on employers and employees, based on employee wages and salaries.

PEO (Professional Employer Organization) 

A Professional Employer Organization (PEO) provides HR services to small and medium-sized businesses through a co-employment arrangement.

Petty Cash 

Petty Cash is a small amount of physical cash kept by a business for minor expenses that can't be paid through formal payment methods.

Pitch Deck

A pitch deck is a brief visual presentation startups use to show their business model, product, market, financials, and funding needs to potential investors.

Portfolio Company 

A Portfolio Company is a business entity in which a venture capital firm, private equity firm, or other investment entity holds an equity stake.

Positive Pay

Positive Pay helps prevent fraud by letting banks verify issued checks using a list of check numbers, amounts, and payees from the business.

Post-Money Valuation

A Post-Money Valuation is the estimated value of a company immediately after receiving external funding or capital injection.

Pre-Money Valuation 

A Pre-Money Valuation is the estimated market value of a company immediately before it receives new external funding.

Pre-Seed Funding 

Pre-Seed Funding is the earliest external investment a startup receives, often from angel investors, friends and family, or early-stage venture funds.

Preferred Return

A Preferred Return is a guaranteed minimum rate of return promised to certain classes of investors, often preferred shareholders.

Preferred Stock

Preferred stock is a type of equity that has priority over common stock in dividend payments and asset distribution during liquidation.

Present Value (PV)

Present Value (PV) calculates the current worth of future cash flows, discounted at a specific interest or discount rate.

Primary Shares

Primary Shares refer to new shares issued directly by a company to raise additional capital.

Private Equity

Private Equity (PE) involves investing in privately held companies through direct equity, buyouts, or strategic funding rounds, outside public stock exchanges.

Private Equity (P/E) Ratio

The Private Equity (P/E) Ratio is a valuation multiple that compares a company’s market value to its earnings.

Private Placement 

A Private Placement is a fundraising method where securities are sold directly to a limited number of accredited investors.

Pro Rata

Pro Rata is a Latin term meaning "in proportion." In finance and legal agreements, pro rata rights or calculations refer to the proportional allocation.

Procure to Pay (P2P)

Procure to Pay (P2P) is the end-to-end process of purchasing goods or services from suppliers and processing payments for them.

Product Development

Product Development is the process of ideating, designing, building, testing, and launching a product or service to meet market needs or business opportunities.

Product Velocity

Product velocity is the speed and efficiency at which a team delivers new features, updates, or improvements over a set period.

Product-Market Fit (PMF)

Product-Market Fit (PMF) is when a product or service meets strong market demand, shown by consistent customer adoption, retention, and revenue growth.

Profit

Profit is the financial gain a business achieves when its total revenue exceeds its total expenses, taxes, and costs over a specific period.

Profit and Loss (P&L) Statement

The Profit and Loss (P&L) Statement, or Income Statement, summarizes a company’s revenues, expenses, and profits or losses over a specific period.

Programmatic Funding

Programmatic Funding is a structured approach to allocating financial resources to specific programs or projects within an organization or portfolio.

Qualified Small Business Stock (QSBS)

Qualified Small Business Stock (QSBS) is a stock type offering major tax benefits to investors under Section 1202 of the U.S. Internal Revenue Code.

Quick Ratio

The Quick Ratio (Acid-Test Ratio) measures a company’s ability to cover short-term liabilities with its most liquid assets.

Ramp Time

Ramp time is the period it takes for a new employee, especially in sales, to reach full productivity or meet performance targets.

Recurring Revenue

Recurring Revenue is the portion of a business’s revenue that is expected to continue in the future on a regular, predictable basis.

Refinancing

A 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.

Refund Accounting

Refund Accounting involves the recording and financial treatment of returned payments or product refunds in a company’s books.

Registered Investment Advisor (RIA)

A Registered Investment Advisor (RIA) is a firm or individual offering financial advice and investment management while adhering to fiduciary standards.

Repeat Customer Rate

Repeat Customer Rate measures the percentage of customers who make multiple purchases from a business within a given timeframe.

Research and Development (R&D) Tax Credit

The R&D Tax Credit lowers taxes for businesses investing in innovation, product development, and process improvements.

Retained Earnings

Retained earnings are a company’s cumulative net income kept in the business instead of being paid out as dividends to shareholders.

Retention

Retention refers to a company's ability to keep existing customers, employees, or clients over a specified period.

Return on Assets (ROA) 

Return on Assets (ROA) measures a company's ability to generate profit relative to its total assets.

Return on Capital Employed (ROCE)

Return on Capital Employed (ROCE) is a profitability ratio that measures how efficiently a company uses its capital (debt and equity) to generate profits.

Return on Equity (ROE)

Return on Equity (ROE) measures a company’s ability to generate net profits from shareholders’ equity.

Return on Invested Capital (ROIC) 

Return on Invested Capital (ROIC) measures the return generated by a company on the capital invested by both shareholders and debt holders.

Return on Investment (ROI) 

Return on Investment (ROI) is one of the most essential financial metrics used to measure the efficiency or profitability of an investment.

Return on Revenue (RoR) 

Return on Revenue (RoR), also known as Net Profit Margin, assesses how much profit a company generates for every unit of revenue earned.

Revenue

Revenue is the total income generated by a business from its primary operations, typically through the sale of goods or services, before deducting any expenses.

Revenue Forecast 

A Revenue Forecast is a financial projection that estimates a company’s future revenue over a specified period, typically monthly, quarterly, or annually.

Revenue Recognition 

Revenue Recognition is an accounting principle that dictates when and how a business should record its earned revenue.

Revenue Run Rate

A Revenue Run Rate is a financial metric used to estimate the company’s future revenue based on current financial performance.

Right of First Refusal (ROFR) 

A Right of First Refusal (ROFR) gives existing stakeholders the option to buy an asset or equity before it's offered to outside parties.

Risk Capital 

Risk Capital refers to the funds invested in high-risk, high-reward ventures such as startups, early-stage companies, or speculative investments.

Roll-Up Vehicle (RUV) 

A Roll-Up Vehicle (RUV) pools investors into one entity, usually an SPV, to collectively invest in a target company.

Rolling Budget 

A Rolling Budget adds a new period as one ends, keeping a continuous 12-month (or similar) budget plan to ensure ongoing financial planning.

Rolling Forecast 

A Rolling Forecast is a continuous financial projection that extends beyond the traditional fiscal year-end.

Round of Funding

A Round of Funding is a stage in which a company raises capital from external investors to support its growth, operations, or strategic initiatives.

Run Rate

A run rate is a financial projection that estimates future performance by annualizing revenue or profit figures from a shorter period, like monthly or quarterly

Runway

Runway is a metric that indicates how long a company can continue operating at its current burn rate before it runs out of cash.

S Corporation (S Corp) 

An S Corporation (S Corp) is a type of corporation that passes income, losses, deductions, and credits to shareholders for federal tax purposes.

S-Corp Election 

An S-Corp Election is when a qualifying corporation opts to be taxed as an S Corporation by filing Form 2553 with the IRS.

SaaS (Software as a Service) 

Software as a Service (SaaS) is cloud-hosted software delivered online via subscription, allowing users to access applications without local installation.

SaaS Churn

SaaS Churn refers to the percentage of customers who cancel their subscription or stop using a SaaS product within a given period.

SaaS Metrics

SaaS Metrics are KPIs used to measure the financial health, growth, and performance of Software as a Service (SaaS) businesses.

SAFE Note 

A SAFE (Simple Agreement for Future Equity) Note is a financing contract used by startups to raise early-stage capital without immediately setting a valuation.

Sales and Marketing Efficiency

Sales and Marketing Efficiency measures how effectively a business converts its sales and marketing investments into revenue.

Sales Pipeline 

A Sales Pipeline is a visual or digital representation of the stages a prospective customer goes through before making a purchase.

Sales Tax 

Sales Tax is a consumption-based tax imposed by governments on the sale of goods and services.

Sales Tax Filing 

Sales Tax Filing is the process of reporting and remitting the sales taxes a business collects from customers to the appropriate tax authorities.

Secondary Market 

The Secondary Market is where previously issued securities, like stocks and bonds, are bought and sold between investors.

Secondary Shares

Secondary shares are existing company shares sold by current shareholders (e.g., founders, employees, early investors) rather than newly issued shares.

Section 382

Section 382 of the U.S. IRC limits a company's ability to use tax loss carryforwards after a significant change in ownership.

Secured Loans 

A Secured Loan is a type of loan backed by collateral — a valuable asset such as real estate, equipment, accounts receivable, or inventory.

Seed Capital 

Seed Capital is the initial funding for a new business, usually provided by founders, family, friends, or angel investors, to cover early-stage expenses.

Seed Funding 

Seed funding is an early fundraising round where a startup raises capital to support product development, market research, hiring, and go-to-market efforts.

Seed Round 

A Seed Round is the first significant round of equity financing for a startup, often following informal seed capital.

Series A Funding 

Series A Funding is the first round of institutional venture capital financing for a startup after the seed round.

Series B 

Series B Funding is a venture capital round for startups with strong product-market fit, revenue growth, and market traction, aimed at scaling operations.

Series C 

Series C Funding is a later-stage investment round for companies aiming to scale, expand, or prepare for an IPO or acquisition.

Serviceable Available Market (SAM) 

Serviceable Available Market (SAM) refers to the segment of the Total Addressable Market (TAM) that a business’s products or services can specifically serve.

Serviceable Obtainable Market (SOM) 

Serviceable Obtainable Market (SOM) is the portion of the Serviceable Available Market (SAM) that a business can realistically capture in the near term.

Shareholder Voting Rights 

Shareholder Voting Rights are the rights granted to a company’s shareholders to vote on key corporate matters.

Shareholder’s Equity 

Shareholder's Equity is the value remaining in a company after subtracting its liabilities from its assets, representing the owners' stake in the company.

Shareholders’ Agreement 

A Shareholders’ Agreement is a legally binding contract between a company’s shareholders that outlines their rights, responsibilities, and obligations.

Short Term Debt 

Short Term Debt refers to any financial obligations a company must repay within one year from the balance sheet date.

Short-Term Investments 

Short-Term Investments are financial assets that a company intends to convert into cash within a year.

Simple Agreement for Future Equity (SAFE) 

A Simple Agreement for Future Equity (SAFE) is an investment contract between a startup and an investor.

Single-Entry Bookkeeping 

Single-Entry Bookkeeping is a basic accounting method where each transaction is recorded once, as income or expense, usually in a cash book or journal.

Single-Trigger Acceleration

Single-Trigger Acceleration is a clause that accelerates the vesting of unvested stock options upon the occurrence of a single predefined event.

Solvency Ratio

A Solvency Ratio measures a company’s ability to meet its long-term financial obligations and continue operations into the foreseeable future.

Special Purpose Vehicle (SPV) 

A 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.

Startup Accelerators

Startup accelerators help startups grow quickly through funding, mentorship, and networking. This guide explores what they are and how they work.

Startup Bootstrapping 

Bootstrapping refers to the process of starting and growing a business without external funding, relying instead on personal savings, reinvested profits, or operational revenue.

Startup Ecosystem 

The startup ecosystem is a network of individuals, organizations, resources, and services that support the creation, growth, and scaling of startups.

Startup Incubation

Startup incubation is a structured program that helps early-stage startups refine ideas, build prototypes, develop business models, and prepare for market entry

State Tax 

State Tax is a tax levied by individual state governments on businesses and residents operating within their jurisdiction.

Statement of Cash Flows 

The 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.

Statutory Audit 

A statutory audit is a mandatory review of a company’s financials to ensure accuracy, compliance with accounting standards, and adherence to regulations.

Stock Options 

Stock Options allow individuals to buy company shares at a set price within a specific period, often used to reward employees or attract investors.

Stock Warrant 

A 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.

Strategic Finance 

Strategic Finance uses financial planning, analysis, and data-driven decisions to align a company’s financial operations with its long-term goals.

Strategic Investor 

A strategic investor provides capital to a startup for both financial return and strategic benefits, such as market expansion or technology access.

Subscription Model

A Subscription Model is a recurring revenue model where customers pay a fixed, regular fee for continuous access to a product or service.

Sunk Cost Fallacy

The Sunk Cost Fallacy is a bias where decisions are influenced by past investments of time or money, rather than future benefits or outcomes.

Supply Chain Financing (SCF) 

Supply Chain Financing lets businesses extend supplier payments while enabling early payouts via a financial intermediary, improving cash flow.

Sweat Equity

Sweat equity is the non-cash investment of time, effort, and skills by founders or employees in exchange for equity ownership.

Syndicate

A Syndicate is a group of investors who collectively invest in a startup or venture capital deal.

Target Company

A Target Company refers to a firm that is the subject of an acquisition attempt by another entity, known as the acquirer.  

Tax Allowance

A Tax Allowance is a portion of income that is exempt from taxation, reducing the total taxable income.

Tax Bracket

A Tax Bracket defines the range of income taxed at a specific rate, forming the basis of a progressive tax system.

Tax Credit

A Tax Credit is a direct reduction of the tax owed, offering a dollar-for-dollar decrease in tax liability.

Tax Deduction

A Tax Deduction reduces taxable income, thereby lowering the overall tax liability.

Tax Nexus

A tax nexus is the connection between a business and a taxing jurisdiction, requiring the business to collect and remit taxes in that area.

Taxable Income

Taxable income is the income subject to taxation after deductions, exemptions, and allowances are applied, forming the basis for calculating tax liability.

Taxes

Taxes are compulsory financial charges imposed by a government on individuals, businesses, or transactions to fund public services and infrastructure.

Term Sheet

A 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.

Term Sheet Negotiation

Term sheet negotiation is the discussion between founders and investors to agree on key investment terms before drafting final, legally binding agreements.

Third-Party Logistics (3PL)

Third-Party Logistics (3PL) refers to the outsourcing of logistics and supply chain management operations.

Top-Line Growth

Top-line growth refers to an increase in a company’s gross revenue or sales before deducting any expenses.

Total Addressable Market (TAM)

Total Addressable Market (TAM) is the total revenue opportunity available for a product or service if it captured 100% market share within a specific segment.

Trailing Twelve Months (TTM)

Trailing Twelve Months (TTM) refers to a financial performance metric that aggregates a company’s financial data over the past 12 consecutive months.

Transactional Funding

Transactional funding is a short-term, bridge financing arrangement used in fast-paced transactions like real estate wholesale deals, mergers, or trade finance.

Underwriting

Underwriting is the process where financial institutions assess the risk of an investment, loan, or insurance policy before approval.

Unique Selling Proposition (USP)

A 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.

Valuation

Valuation is the analytical process of determining the current or projected worth of an asset, business, or investment.

Value Proposition

A Value Proposition is a clear, concise statement that describes the unique value a product or service delivers to customers.

Variable Costs

Variable costs are business expenses that fluctuate with production or sales volume, such as raw materials, packaging, and commissions.

Variable Interest Entity (VIE)

A Variable Interest Entity (VIE) is a business structure where an investor controls the entity through contractual agreements, not direct equity ownership.

Variance Report

A Variance Report compares planned financial outcomes (budgeted figures) with actual results, highlighting deviations (variances).

Venture Capital

Venture Capital (VC) is private equity funding for early-stage startups and small businesses with high growth potential.

Venture Capital Associate

A VC Associate sources, evaluates, and supports startup investments, managing due diligence, market research, and portfolio to identify growth opportunities.

Venture Capital Fund Reserves

Venture Capital Fund Reserves are a portion of a fund’s capital set aside for follow-on investments in existing portfolio companies.

Venture Capital Partner

A Venture Capital Partner is a senior executive in a venture capital firm, responsible for making key investment decisions and managing operations.

Venture Capital Principal

A Venture Capital Principal occupies a mid-to-senior investment role, bridging the gap between Associates and Partners.

Venture Debt

Venture debt is financing option for early-stage startups, offering loans to companies with equity backing but no profitability or assets for traditional loans

Vesting Acceleration

Vesting Acceleration speeds up the vesting of unvested equity based on specific events defined in stock option or equity grant agreements.

Viral Growth

Viral growth is rapid, exponential growth driven by word-of-mouth and referrals, without a matching increase in marketing costs.

Warrant

A 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.

Weighted Average Cost of Capital (WACC)

The 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.

Working Capital

Working Capital is a financial metric that represents the difference between a company’s current assets and current liabilities.

Working Capital Loan

A Working Capital Loan is short-term funding that helps businesses cover daily expenses like payroll, rent, inventory, and accounts payable.

Working Capital Management

Working capital management is the strategic handling of short-term assets and liabilities to ensure liquidity for operations while optimizing profitability.

Year to Date (YTD)

Year 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.

Year-Over-Year (YOY)

Year-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.

Yield

Yield is the income return from an investment, expressed as an annual percentage of its cost, market value, or face value.

Zombie Company

A Zombie Company is a financially distressed business that continues to operate despite being unable to cover its debt interest payments from operating profits.

Zombie Spend

Zombie Spend refers to unnoticed, recurring, or unnecessary business expenses that continue without proper oversight or scrutiny.