Startup Glossary

Validation in the startup context refers to the process of testing and proving that a business idea or model is viable in the real market.

Valuation is the process of determining the current worth of a startup or company, often used by investors to gauge the potential for future growth and profitability.

A Valuation Adjustment Mechanism is a contractual agreement between investors and company owners that allows for adjustments to the valuation based on specific future performance criteria.

A Valuation Cap is a term used in convertible notes, setting a maximum valuation at which the note will convert into equity.

A Value Chain is a series of activities that businesses operate to deliver a valuable product or service to the market.

Value Creation is the process through which businesses generate value for shareholders, customers, and society.

Value Engineering is a systematic method to improve the "value" of goods or products and services by using an examination of function.

Value Innovation focuses on making the competition irrelevant by creating a leap in value for both the company and its customers, distinguishing it from traditional competitive strategies.

A Value Proposition is a statement that summarizes why a consumer should buy a product or use a service, explaining the value the product provides.

Value Stream Mapping is a lean-management method for analyzing the current state and designing a future state for the series of events that take a product or service from its beginning through to the customer.

Value-Added Services are additional services offered by a company to add value to their core offerings, enhancing customer satisfaction and competitive advantage.

Variable Costs are expenses that change in proportion to the activity or volume of a business.

A Variable Interest Entity is a legal business structure that allows a company to consolidate a business entity it does not directly control or majority-own, often used in venture financing structures.

A Vested Interest is a personal stake or involvement in an undertaking or state of affairs, especially with an expectation of financial gain.

Vendor Due Diligence is a pre-transactional analysis performed by the seller on behalf of the interested parties, aiming to increase the efficiency and speed of the sale process.

Vendor Financing is a way for a company to provide its customers with funds to purchase its products or services.

Venture Building refers to the process of systematically producing new companies, products, or projects from within a venture studio or company, leveraging internal resources and capabilities.

Venture Capital is financing that investors provide to startup companies and small businesses that are believed to have long-term growth potential.

A Venture Capitalist is an investor who provides capital to startups with high growth potential in exchange for an equity stake.

Venture Debt is a type of debt financing provided to venture-backed companies by specialized banks or non-bank lenders.