Startup Glossary

SaaS (Software as a Service) Metrics are specific metrics used to measure the performance and health of a SaaS startup, such as MRR (Monthly Recurring Revenue) and churn rate.

A SAFE (Simple Agreement for Future Equity) is an investment agreement between a startup and investors, promising future equity in the company without specifying the exact terms until a later financing round.

A Sales Performance Incentive Fund is a fund created within a company to reward employees for achieving sales targets, often used in startups to motivate growth without high fixed salaries.

Scalability is the potential of a startup to grow significantly and manage increased demand without compromising performance or losing revenue.

Scalability Analysis is the assessment of a startup`s potential to expand its operations and grow revenues significantly without equally significant increases in costs.

A Scalable Model is a business model that can easily adapt and grow in response to increased demand without a significant increase in costs or resources.

A Scalable Startup is a startup designed from the outset to grow rapidly and scale to a large size, often requiring significant amounts of capital to achieve.

Secondary Equity Offerings are offerings of new stock by a company that has already gone public, which can dilute existing shares but also raise additional capital.

Secondary Financing involves the sale of newly issued shares to investors by a company that has already gone through initial financing rounds.

The Secondary Market is a market where investors buy and sell existing shares of a private company from each other, rather than from the company directly.

A Seed Accelerator is a program that provides startups with mentorship, resources, and sometimes capital, in exchange for equity, to accelerate their growth.

Seed Capital is initial funding used to begin developing a product or service, typically from personal savings, friends, or family.

The Seed Round is the initial funding stage aimed at getting a startup off the ground before it has generated any significant revenue.

The Seed Stage is the early phase of a startup, typically characterized by developing the initial concept, product development, and seeking seed capital.

The Series A Crunch refers to the difficulty startups may encounter in raising Series A funding after completing their seed round, often due to heightened investor expectations and the need for demonstrated traction and growth.

Series A/B/C Funding represents successive rounds of venture capital funding that a startup may secure after initial seed capital. Each round provides additional capital for growth and development, often in exchange for equity, and signifies advancing stages of a startup`s maturity.

Shadow Equity is a form of incentive that mimics the benefits of owning equity in a company, such as profit sharing or performance bonuses, without granting actual equity shares. It`s often used to motivate and reward employees or consultants.

Share Allocation is the process through which a company distributes its shares among investors, founders, and employees. This process is crucial during fundraising or compensation planning, establishing the ownership structure of the company.

Share Conversion Rights allow shareholders to convert their shares from one type (e.g., preferred) into another type (e.g., common), potentially at predetermined conditions or triggers, offering flexibility in investment terms.

Share Dilution occurs when a company issues new shares, reducing the ownership percentage of existing shareholders. This often happens during new funding rounds, acquisitions, or when options and warrants are exercised.