The capital raising glossary
Clear, plain-English definitions of the terms founders and investors use when raising a round. No jargon, no fluff.
Pre-seed
The earliest priced or uncapped funding round.
Read the definitionSeed
The round that funds early product and traction.
Read the definitionSeries A
The first priced round to scale a proven model.
Read the definitionSAFE
A Simple Agreement for Future Equity.
Read the definitionValuation cap
The maximum valuation at which a SAFE or note converts.
Read the definitionDilution
The reduction in ownership as new shares are issued.
Read the definitionTerm sheet
A non-binding outline of the key deal terms.
Read the definitionCap table
A record of who owns what in the company.
Read the definitionData room
A secure place to share diligence documents.
Read the definitionLead investor
The investor who sets terms and anchors the round.
Read the definitionRunway
How long your cash lasts at the current burn.
Read the definitionBurn rate
How much cash a company spends each month.
Read the definitionConvertible note
Debt that converts into equity in a later round.
Read the definitionPro rata
The right to keep your ownership in future rounds.
Read the definitionLiquidation preference
The payout order investors get in an exit.
Read the definitionESOP
The pool of equity reserved for employees.
Read the definitionValuation
What a company is worth in a financing.
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