How startups and funds raise capital — SAFEs, convertible notes, priced rounds, and LP fundraising strategies.
64 terms
A fixed-term program that provides startups with mentorship, resources, and a small amount of capital in exchange for equity, culminating in a demo day.
The first or largest investor in a funding round who sets the terms and signals confidence to other investors.
The earliest institutional funding round, typically $100K-$2M from individual angel investors.
A group of angel investors who pool capital to co-invest in deals together, typically organized through platforms like AngelList.
A company that grows using revenue and founder capital rather than external investment.
Building and growing a company using only personal savings, revenue, and operating cash flow — without raising outside equity capital.
Short-term financing that helps a startup survive until it closes its next equity round — typically structured as a convertible note that converts into the new round.
A small fundraise between larger priced rounds, typically done via SAFE or convertible note to extend runway to a key milestone.
A spreadsheet or software record showing every equity holder in a company — founders, investors, employees — and their ownership percentages, share counts, and fully diluted stakes.
The legal and administrative process of finalizing a funding round, including signing documents and wiring funds.
A funding round where multiple investors co-invest at the same terms without a clear lead investor.
A short-term debt instrument that converts into equity at a future financing round. An early-stage fundraising tool that carries an interest rate and maturity date, unlike a SAFE.
A secure online repository where startups share sensitive business documents with potential investors during due diligence.
Raising capital through loans or credit rather than selling equity, preserving ownership but creating repayment obligations.
The culminating event of an accelerator program where startups pitch their companies to a room of investors.
The reduction in an existing shareholder's ownership percentage that occurs when a company issues new shares — through equity rounds, option grants, or convertible instrument conversions.
A financing round completed at a lower valuation than the previous round. Down rounds trigger anti-dilution protections for existing investors and can be highly dilutive for founders and employees.
The investigative process a VC conducts before investing — reviewing financials, references, technology, legal documents, and market assumptions.
A concise, compelling summary of a business that can be delivered in 30-60 seconds.
A dedicated portion of an LP's venture capital budget specifically reserved for investing in first-time or early-vintage fund managers who lack established track records.
A dedicated allocation within an LP's portfolio specifically for investing in first-time or early-career fund managers.
Raising capital by selling ownership shares in the company.
The last date on which a venture fund accepts new LP commitments, marking the end of the fundraising period and establishing the fund's total committed capital.
The reduction in a founder's ownership percentage as new shares are issued through funding rounds and option grants.
A measurable goal achieved by a company that enables raising the next funding round.
A late-stage funding round focused on scaling a proven business model, typically Series C and beyond.
A fundraise with multiple competing investors, often closing above target amount and at better-than-expected valuations for the startup.
An organization that supports very early-stage startups with resources, mentorship, and sometimes space — typically without a defined program end date, unlike accelerators.
A funding round led by existing investors without participation from new outside investors.
A funding round primarily led by existing investors rather than new external capital.
Large organizations—pension funds, endowments, insurance companies, sovereign wealth funds—that allocate significant capital to venture funds as part of a diversified investment portfolio.
The process of multiple investors participating together in a financing round.
The risk that arises when a fund is overly dependent on one or a few LPs for the majority of its committed capital, creating vulnerability if those LPs default or do not re-up.
The investor that sets the terms for a funding round, invests the largest check, and often takes a board seat.
An extremely fast financing round where investors commit capital quickly with minimal process.
A specific, measurable achievement that a startup must reach to unlock additional funding, demonstrate progress, or meet investor expectations.
Information or events that cause investors to question a company's prospects, making fundraising more difficult.
When an existing investor's decision not to participate in a follow-on round sends a bearish signal to potential new investors.
Capital sources that don't require giving up equity — including grants, loans, revenue-based financing, and government programs.
A fundraising round that receives more investor commitments than the company (or fund) is seeking to raise — creating scarcity and competitive pressure.
A funding round with many small investors and no clear lead investor — often assembled quickly during hot markets, with minimal due diligence.
A slide presentation used by founders to communicate their business to potential investors, typically 10-15 slides covering problem, solution, market, traction, and team.
The earliest stage of startup funding — typically $250K-$2M raised before having a product or significant traction, often from angels and pre-seed funds.
An investor offering to lead a round before the company formally begins fundraising.
A funding round initiated by an investor approaching a company before it was planning to fundraise, often at a premium valuation.
New equity capital raised directly by a company and added to its balance sheet — as opposed to secondary capital, where existing shareholders sell their shares.
Conversations with former colleagues, investors, and customers of a founder to verify their character, skills, and track record before investing.
A discrete fundraising event where a company raises a specific amount of capital at a set valuation — named sequentially (Seed, Series A, B, C, etc.).
Actions taken to extend the time before a company runs out of cash.
A Simple Agreement for Future Equity — a financing instrument that converts into equity at a future priced round. The dominant early-stage fundraising tool, replacing convertible notes for most pre-seed and seed raises.
Growth capital provided to companies that have achieved product-market fit and need funding to rapidly scale operations, sales, and market presence.
An additional fundraise at the same terms as a previous seed round — used when a company needs more capital before being ready for a Series A.
The first institutional financing round for a startup, typically ranging from $500K to $5M. Used to fund initial product development, early hiring, and customer validation.
The first major institutional venture round, typically ranging from $5M to $20M. Raised after demonstrating product-market fit and initial revenue traction, used to scale go-to-market and team.
The third major institutional funding round, typically raised after demonstrating product-market fit and early revenue traction, used to scale sales, marketing, and operations.
A startup's third major equity round ($15M-$50M+), raised to scale a proven business model — expand the team, enter new markets, and build enterprise infrastructure.
A later-stage venture round typically raised by companies with proven growth, used to scale aggressively, enter new markets, or position for an eventual IPO or large acquisition.
A late-stage round ($100M-$500M+) typically raised by companies delaying IPO, pursuing major acquisitions, or needing additional capital for international expansion at massive scale.
A very late-stage funding round ($200M-$1B+) for mature private companies, typically raised to fund major acquisitions, delay IPO, or support continued growth at massive scale.
A state-owned investment fund that deploys national wealth into venture capital and other asset classes, often with very long time horizons and strategic national objectives.
The practice of funding startups through sequential rounds, each with increasing amounts and valuations as the company de-risks.
A group of investors co-investing in a deal together, often organized by a lead investor who does diligence and brings in other investors at the same terms.
Short-term financing used to cover operational expenses.
A highly speculative investment round driven by hype rather than disciplined diligence.