cap (on a convertible note)

The maximum company valuation at which a convertible note will convert into a company’s stock.

cap table (capitalization table)

A record of all securities and their shareholders commonly displayed in a fully diluted view.

3 Key Cap Table Management Concepts

cash flow statement

Reconciles the beginning cash balance to the ending cash balance by illustrating the sources and uses of cash from operations, investing, and financing activities.

common stock

A US term for a form of equity ownership of a company, equivalent to the terms “voting share” or “ordinary share” used in other parts of the world. In a liquidity event or a bankruptcy, common stockholders receive all of the net value of a company after paying the fixed amounts due to bondholders, creditors and preferred stockholders. Common stock usually carries with it the right to vote on certain matters, such as electing the board of directors.

Who should I grant Common Stock to? How to value your pre-seed startup’s stock

convertible note

A type of loan (also known as convertible debt) which provides that the amount of money loaned may (or must, under certain conditions) be converted by the investor into shares of stock in the company at a particular price.

How does Convertible Debt work?

convertible preferred stock

Preferred stock in a company that is convertible at the option of the holder into common stock at a predetermined valuation. This provides the priority and security of holding preferred stock, as well as the potential value appreciation of common stock.

What kind of stock should investors receive? Why should different stock classes in a startup be created?

corporate venture

An investment from one corporation in another, typically at an early stage for strategic reasons.

crowdfunding

A joint effort by many individuals to support a cause, project or company. Donation-based crowdfunding bears no expectation of returns. In reward-based crowdfunding, contributors are promised rewards (such as the ability to purchase a product) in exchange for their contributions. Equity-based crowdfunding gives funders the ability to purchase equity interests in a company.

Limiting the Number of Shareholders in Private Companies

customer lifetime value (CLTV or LTV)

A forecast of the total net profit related to the entire lifetime of a specific customer relationship.