patent

An exclusive right, granted by the federal government, conferring the rights to exclude others from making, using, or selling an invention, design, or process for a fixed amount of time.

How do startup founders manage legal issues and compliance?

pay-to-play

A term in VC financings that requires investors to participate in future down-valuation financings of the company, or else suffer punitive consequences (such as getting their preferred stock converted into common stock). One reason why investors keep some dry powder on hand.

peer-to-peer lending (P2P lending)

A type of online financing solution through which individuals lend money to other individuals or small businesses.

pitch

A presentation, typically supported by slides, in which a startup company’s founder describes his or her company and seeks an investment from angels or venture capitalists.

18 Ways to Make Your Financial Model Stand Out to Investors What Belongs in a Startup’s Pitch Deck?

portfolio

A collection of companies invested in by an angel or VC.

post-money valuation

The value of a company immediately after it has received an equity investment, including both the company’s pre-money valuation and the amount it received from the investment.

Pre-money and Post-money Valuation

pre-money valuation

The value of a company immediately prior to receiving an investment, used to determine what percentage of a company’s ownership will be purchased in exchange for a specified investment amount.

Valuation Part I: Peeling the Onion, or How Top Investors Value the Startups They Invest In

preferred stock

A type of equity ownership of a company that has both a fixed value and priority in liquidation sequence.

private companies

Companies that are not publicly traded on the stock market.

public companies

Companies that are freely traded on the public stock exchanges such as NASDAQ and the New York Stock Exchange.