Glossary
Short definitions of fundraising, accelerator, and grant terms. Link straight to any one of them.
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Demo day
Demo day is the public showcase at the end of an accelerator program, where each cohort company pitches investors over a compressed window. Usually a single afternoon of three-to-five-minute presentations.
Dilution
Dilution is the drop in your ownership percentage when a company issues new shares. It happens at every priced round and option pool top-up.
Discount (SAFE / convertible)
A discount on a SAFE or convertible note is a percentage off the price-per-share at the next priced round, rewarding the early investor for putting cash in before the round was priced.
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Post-money valuation
Post-money valuation is the value of a company immediately after it receives a round of investment. Pre-money valuation plus the new money in.
Pre-Money Valuation
The pre-money valuation is what your company is worth immediately before an investment round closes. Add the new investment to get the post-money valuation.
Pro-rata rights
Pro-rata rights give an existing investor the right (but not the obligation) to participate in future financing rounds at a level that maintains their current ownership percentage.
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SAFE
A SAFE (Simple Agreement for Future Equity) lets an investor convert cash into equity at a future priced round, without setting a valuation today.
SBIR / STTR
SBIR and STTR are U.S. federal R&D grant programs that fund early-stage commercialization of technology in small businesses. Non-dilutive, milestone-based, run across 11 federal agencies.
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Valuation cap
A valuation cap is the maximum company valuation at which a SAFE or convertible note will convert into equity, regardless of the actual price of the future round.
Vesting cliff
A vesting cliff is the minimum period an employee or founder must stay at a company before any of their equity grant becomes vested. Usually one year, after which the cliff portion vests at once.