Fundraising Glossary

Plain-English definitions of the terms you will meet in a round, each with an example.

66 terms

Accelerator

A fixed-length programme that gives startups mentoring, a network and usually a small investment in exchange for equity.

Example: A three-month programme investing €100k for 7% and ending with a demo day.

Accelerator Finder →

Angel investor

An individual who invests their own money in early-stage companies, often with operating experience in the sector.

Example: A former SaaS founder writes a €25k cheque into your pre-seed round.

Anti-dilution

A clause protecting investors if a later round is priced lower than theirs, by adjusting their conversion price.

Example: After a down round, a broad-based weighted-average clause gives seed investors some extra shares.

ARPU

Average revenue per user (or account) over a period, usually monthly.

Example: €30k MRR across 250 customers = €120 ARPU.

LTV Calculator →

ARR

Annual recurring revenue: the yearly value of active subscription contracts, excluding one-off fees.

Example: 100 customers paying €200 a month = €240k ARR.

Startup Valuation Calculator →

Board of directors

The group that oversees the company and approves major decisions; investors often take a seat after leading a round.

Example: After seed, the board has two founders and one investor.

Bridge round

A small round, often convertible, that extends runway until a larger priced round.

Example: Existing investors put in €300k on a convertible note to reach Series A metrics.

Burn multiple

Net burn divided by net new ARR in the same period; a measure of how efficiently a company grows.

Example: Burning €1.2M to add €600k ARR gives a burn multiple of 2.

Burn Rate Calculator →

Burn rate

How much cash a company spends per month. Gross burn is total spending; net burn subtracts incoming cash.

Example: €60k expenses and €15k revenue = €45k net burn.

Burn Rate Calculator →

CAC

Customer acquisition cost: sales and marketing spend divided by new customers won.

Example: €30k spend for 60 customers = €500 CAC.

CAC Calculator →

CAC payback

Months of gross margin needed to recover the cost of acquiring a customer.

Example: €600 CAC and €90 monthly gross margin per customer = about 6.7 months.

LTV Calculator →

Cap table

A table listing who owns which shares, options and convertibles in a company.

Example: Founders 70%, option pool 10%, seed investors 20%.

Cap Table & Dilution Calculator →

Carried interest

The share of fund profits (typically 20%) that VC partners receive after returning investors’ capital.

Example: A €50M fund returning €150M pays roughly €20M carry to the partners.

Churn

The share of customers or revenue lost in a period.

Example: Losing 6 of 200 customers in a month = 3% monthly churn.

LTV Calculator →

Cliff

The initial period before any vesting happens; leaving before it means losing unvested shares.

Example: With a one-year cliff, a co-founder who leaves after 10 months keeps nothing.

Convertible note

A loan that converts into equity at a later round, usually with a cap and discount, and accrues interest.

Example: A €200k note with 5% interest converts at Series A at a 20% discount.

Cap Table & Dilution Calculator →

Data room

An organised online folder of documents investors review during due diligence.

Example: Folders for corporate documents, financials, contracts, IP and team.

Fundraising Templates Library →

Deck

Your pitch presentation, usually 10–15 slides, sent ahead of or shown during investor meetings.

Example: A send-ahead deck with more detail than the one you present live.

Pitch Check →

Dilution

The reduction of existing shareholders’ percentage when new shares are issued.

Example: Selling 20% in a round turns a founder’s 50% into 40%.

Cap Table & Dilution Calculator →

Down round

A round priced at a lower valuation than the previous one.

Example: Series A at €20M pre after a seed at €25M post.

Drag-along

A right that lets a majority of shareholders force the minority to join in a sale of the company.

Example: Holders of 75% agree to sell; drag-along obliges the remaining 25% to sell too.

Due diligence

The investor’s verification of your company before closing: legal, financial, technical and commercial.

Example: The lawyer checks that all IP was assigned to the company.

EISEurope

Enterprise Investment Scheme: UK tax relief for individuals investing in qualifying companies, up to higher limits than SEIS.

Example: A UK angel claims 30% income tax relief on a £100k EIS investment.

ESOP

Employee share option plan: options reserved for team members, usually 10–15% of the company.

Example: A senior engineer receives options over 0.5%, vesting over four years.

Cap Table & Dilution Calculator →

Estonian OÜEurope

A private limited company in Estonia, popular with founders via e-Residency for fully online administration.

Example: A Slovak team incorporates an OÜ to raise from investors who prefer its simple corporate law.

EU grants vs equityEurope

Grants (e.g. Horizon Europe, EIC Accelerator, national programmes) give non-dilutive money with reporting obligations; equity gives flexible money for ownership.

Example: A deep-tech startup combines a €2.5M EIC grant with an equity component and a seed round.

Funding Goal Calculator →

Exit

The event where investors and founders turn their shares into cash: an acquisition or IPO.

Example: A trade sale to a larger competitor after seven years.

Investor ROI Calculator →

Follow-on

An investor investing again in a later round of a company already in their portfolio.

Example: The seed fund reserves capital to follow on at Series A.

Founder vesting

Founder shares that are earned over time, protecting the company if a founder leaves.

Example: Four years with a one-year cliff, monthly thereafter.

Fully diluted

Share count including all options, warrants and convertibles as if they were exercised or converted.

Example: 1M issued shares plus 150k options = 1.15M fully diluted.

Cap Table & Dilution Calculator →

Gross margin

Revenue minus direct cost of delivering it, as a percentage of revenue.

Example: €100k revenue, €25k hosting and support = 75% gross margin.

LTV Calculator →

IRR

Internal rate of return: the annualised return of an investment, accounting for time.

Example: 3× over five years ≈ 25% IRR.

Investor ROI Calculator →

j.s.a.Europe

Jednoduchá spoločnosť na akcie — Slovakia’s simple joint-stock company, built for startups, allowing share classes and easier investor entry.

Example: A Bratislava startup converts from s.r.o. to j.s.a. before its seed round.

Lead investor

The investor who sets the terms of a round, usually takes the largest part and does most of the due diligence.

Example: The lead takes €600k of a €1M round; angels follow with the rest.

Liquidation preference

The right of investors to get their money (or a multiple) back before other shareholders in an exit.

Example: A 1× non-participating preference on €2M means investors receive the first €2M or convert, whichever is better.

LP

Limited partner: an investor in a VC fund, such as a pension fund, family office or public fund-of-funds.

Example: The European Investment Fund is an LP in many European VC funds.

LTV

Customer lifetime value: the gross profit a customer generates before churning.

Example: €120 ARPU × 75% margin ÷ 3% churn = €3,000.

LTV Calculator →

LTV:CAC

The ratio of lifetime value to acquisition cost; 3:1 or better is considered healthy.

Example: €3,000 LTV and €600 CAC = 5:1.

LTV Calculator →

Milestone

A measurable achievement the round is meant to fund, which makes the next round possible.

Example: €1M ARR and a repeatable sales motion in two countries.

Funding Goal Calculator →

MOIC

Multiple on invested capital: total value returned divided by amount invested.

Example: €100k becoming €1.2M is a 12× MOIC.

Investor ROI Calculator →

MRR

Monthly recurring revenue from active subscriptions.

Example: 200 customers on €150/month = €30k MRR.

Net revenue retention

Revenue this year from last year’s customers, divided by their revenue last year, including expansion and churn.

Example: 115% NRR means existing customers grew revenue by 15% net.

Option pool shuffle

Creating or enlarging the option pool inside the pre-money valuation, so it dilutes only existing shareholders.

Example: A €4M pre-money including a new 10% pool effectively values the existing company lower.

Cap Table & Dilution Calculator →

Pitch deck

See Deck.

Example: Problem, solution, market, traction, team, business model, ask.

Pitch Check →

Post-money valuation

Company value immediately after the investment: pre-money plus new money.

Example: €2M pre + €500k = €2.5M post.

Pre- and Post-Money Valuation Calculator →

Pre-emption right

An existing investor’s right to invest in future rounds to maintain their percentage.

Example: A 10% holder may buy 10% of the shares issued in the next round.

Pre-money valuation

Company value immediately before the investment.

Example: Investors offer €500k at €2M pre-money.

Pre- and Post-Money Valuation Calculator →

Pre-seed

The earliest institutional round, often before product-market fit, funded by angels, accelerators and pre-seed funds.

Example: €300k from angels and an accelerator to build an MVP and land pilots.

Priced round

A round where shares are issued at an agreed price per share, as opposed to convertible instruments.

Example: Seed round at €2.5M pre-money, €1.25 per share.

Cap Table & Dilution Calculator →

Pro rata

An investor’s right to keep their percentage by investing proportionally in later rounds.

Example: Owning 8%, the investor may take 8% of the Series A.

Runway

Months until the company runs out of cash at its current burn.

Example: €400k cash ÷ €50k net burn = 8 months.

Runway Calculator →

s.r.o.Europe

Spoločnosť s ručením obmedzeným — the Slovak (and Czech) limited liability company. Common and simple, but less flexible for investor rounds than a j.s.a.

Example: Adding an investor to an s.r.o. requires a notarised change of the memorandum and registry update.

SAFE

Simple Agreement for Future Equity: a right to receive shares in a later priced round, usually with a valuation cap and/or discount and no interest.

Example: A €150k SAFE with a €3M cap converts at the cap if Series A is priced higher.

Cap Table & Dilution Calculator →

Scorecard method

A valuation method that adjusts a regional average pre-money valuation by weighted comparison factors.

Example: A team scored 150% vs average raises the valuation by 15%.

Startup Valuation Calculator →

Secondary

The sale of existing shares (from founders, employees or early investors) rather than new shares from the company.

Example: At Series B a founder sells 3% of her shares to a new investor.

Seed round

The first significant round, typically to prove product-market fit and a repeatable growth engine.

Example: €1.5M led by a seed fund to reach €1M ARR.

SEISEurope

Seed Enterprise Investment Scheme: UK tax relief for individuals investing in very early companies, with higher relief rates than EIS.

Example: A UK angel claims 50% income tax relief on a SEIS-eligible investment.

Series A

The first large institutional round after seed, usually to scale a proven model.

Example: €8M to expand from two markets to six.

Syndicate

A group of angels investing together, often led by one experienced angel.

Example: Twelve angels pool €250k through a syndicate lead.

TAM, SAM, SOM

Total addressable market, serviceable addressable market, and serviceable obtainable market — three nested views of market size.

Example: TAM: all EU dental clinics; SAM: clinics in CEE; SOM: those you can win in 5 years.

Term sheet

A short, mostly non-binding document setting out the key terms of an investment.

Example: Pre-money, round size, liquidation preference, board, vesting and protective provisions.

Ticket size

The amount an investor typically puts into one company in one round.

Example: A seed fund with €300k–€1M tickets.

Investor Matcher Lite →

Traction

Evidence that customers want what you make: revenue, usage, growth, retention, signed pilots.

Example: €25k MRR growing 12% month over month.

Valuation cap

The maximum valuation at which a SAFE or note converts, protecting early investors if the next round is priced high.

Example: A €4M cap converts as if the company were worth €4M even if Series A is at €10M.

Cap Table & Dilution Calculator →

Venture debt

Loans to venture-backed companies, often alongside equity rounds, that extend runway with little dilution.

Example: €1M venture debt with warrants after a Series A.

Warm introduction

An introduction to an investor by someone they know and trust; converts far better than cold outreach.

Example: A portfolio founder forwards your short blurb to her investor.

Fundraising Templates Library →

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How it works

Search or filter by letter. Where a term has a calculator, the definition links to it.

Frequently asked questions

What are EIS and SEIS?

UK tax relief schemes that let individual investors reduce tax on investments in qualifying early-stage companies. They matter if you plan to raise from UK angels.

What is a j.s.a.?

A Slovak simple joint-stock company (jednoduchá spoločnosť na akcie), designed for startups: low minimum capital and flexible share classes, which makes investor rounds easier than in an s.r.o.

Grants or equity — which is better?

Grants are non-dilutive but slow, restrictive and paperwork-heavy; equity is fast and flexible but costs ownership. Many European startups combine both.

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