100+ Venture Capital Acronyms Every Investor and Founder Should Know

Fund & Investor Acronyms

**AUM** — Assets Under Management. The total capital a firm manages across all funds. A firm with $5B AUM is managing $5 billion of LP money. **GP** — General Partner. The fund managers who make investment decisions and earn carried interest. **LP** — Limited Partner. The investors who provide capital to VC funds (endowments, pensions, family offices). **GPCI** — GP Capital Interest. The percentage of the fund committed by the GP personally (typically 1-3%). **LPA** — Limited Partnership Agreement. The legal document governing the relationship between GPs and LPs. **PPM** — Private Placement Memorandum. The offering document used to raise capital for a fund. **SPV** — Special Purpose Vehicle. A single-investment entity used for co-investments or one-off deals. **FOF** — Fund of Funds. A fund that invests in other VC/PE funds rather than directly into companies.

Return & Performance Acronyms

**IRR** — Internal Rate of Return. The annualized return that accounts for timing of cash flows. Top-quartile VC funds target 20-30% net IRR. **MOIC** — Multiple on Invested Capital. Total value divided by capital invested (e.g., 3x means tripling your money). **DPI** — Distributions to Paid-In. Cash actually returned to LPs divided by capital contributed. The 'truth metric.' **TVPI** — Total Value to Paid-In. DPI plus unrealized portfolio value. Includes paper gains. **RVPI** — Residual Value to Paid-In. The unrealized (paper) portion of TVPI. **PME** — Public Market Equivalent. Compares PE/VC returns to what LPs would have earned in public markets. **CAGR** — Compound Annual Growth Rate. The smoothed annual growth rate over a period.

Deal & Funding Acronyms

**SAFE** — Simple Agreement for Future Equity. Y Combinator's standardized investment instrument for pre-seed/seed rounds. **MFN** — Most Favored Nation. A SAFE provision ensuring the investor gets terms at least as good as any subsequent SAFE investor. **LOI** — Letter of Intent. A non-binding document outlining proposed deal terms. **IOI** — Indication of Interest. An even more preliminary expression of interest than an LOI. **NDA** — Non-Disclosure Agreement. Confidentiality agreement (rarely signed by VCs for inbound deals). **DD** — Due Diligence. The investigation process before making an investment.

SaaS & Metrics Acronyms

**ARR** — Annual Recurring Revenue. The annualized value of recurring subscription revenue. The north-star metric for SaaS companies. **MRR** — Monthly Recurring Revenue. ARR divided by 12. Used for tracking month-to-month growth. **NDR/NRR** — Net Dollar Retention / Net Revenue Retention. Revenue retained from existing customers including expansion and churn. Above 100% means existing customers are growing. **GRR** — Gross Revenue Retention. NDR without expansion revenue — measures pure churn. **CAC** — Customer Acquisition Cost. Total sales and marketing spend divided by new customers acquired. **LTV** — Lifetime Value. The total revenue a customer generates over their relationship with the company. **LTV:CAC** — Lifetime Value to Customer Acquisition Cost ratio. Healthy SaaS companies target 3:1 or higher. **NPS** — Net Promoter Score. Customer satisfaction metric ranging from -100 to +100.

Startup Acronyms

**MVP** — Minimum Viable Product. The simplest version of a product that delivers core value to test market demand. **PMF** — Product-Market Fit. The point where a product satisfies strong market demand. **TAM** — Total Addressable Market. The total revenue opportunity if you captured 100% of the market. **SAM** — Serviceable Addressable Market. The portion of TAM you can realistically reach. **SOM** — Serviceable Obtainable Market. The portion of SAM you can capture in the near term. **GTM** — Go-to-Market. The strategy for reaching and acquiring customers. **B2B** — Business-to-Business. Companies that sell to other businesses. **B2C** — Business-to-Consumer. Companies that sell directly to consumers. **PLG** — Product-Led Growth. Growth strategy where the product itself drives acquisition and expansion. **CLV** — Customer Lifetime Value. Same as LTV — total revenue from a customer over time.

Legal & Governance Acronyms

**BOD** — Board of Directors. The governing body overseeing company strategy and management. **ESOP** — Employee Stock Option Plan. The pool of stock options reserved for employee compensation. **ISO** — Incentive Stock Option. Tax-advantaged stock options for employees (US-specific). **NSO** — Non-Qualified Stock Option. Stock options without ISO tax advantages. **RSU** — Restricted Stock Unit. A promise to deliver shares upon vesting. **409A** — Section 409A Valuation. An independent appraisal of a private company's common stock fair market value, required for stock option pricing. **83(b)** — Section 83(b) Election. A tax filing that lets founders pay taxes on stock at grant date (low value) rather than vesting date (potentially much higher value).

Fund Structure Acronyms

**ILPA** — Institutional Limited Partners Association. The industry body that sets LP best practices and reporting standards. **LPAC** — Limited Partner Advisory Committee. A group of LPs that advises the GP on conflicts of interest and fund governance. **SLC** — Subscription Line of Credit. Short-term borrowing that delays LP capital calls, which can inflate IRR. **NAV** — Net Asset Value. The current market value of a fund's portfolio minus liabilities. **UBTI** — Unrelated Business Taxable Income. Tax-exempt LPs (endowments, pensions) must avoid UBTI from fund investments. **EIN** — Employer Identification Number. Tax ID for the fund entity.