Glossary Terms
Drag-Along Rights
Rights allowing majority shareholders to force minority shareholders to agree to the sale of the company.
CAC (Customer Acquisition Cost)
The cost of acquiring a new customer, used to assess scalability and marketing efficiency.
Cap Table (Capitalization Table)
A table that shows the ownership stakes, equity dilution, and value of equity in a company.
Board Composition
The structure of a company's board of directors, including founders, investor representatives, and independent members, often formalized during Series A.
Anti-Dilution Rights
Provisions protecting investors from equity dilution in future funding rounds, often by adjusting share price.
Dilution
The reduction in ownership percentage for existing shareholders when new shares are issued in a funding round.
Convertible Note
A short-term loan that converts into equity at a later funding round, often used before Series A.
Burn Rate
The rate at which a company spends its cash reserves, critical for determining how long funding will last.
ARR (Annual Recurring Revenue)
The annualized revenue from subscription-based services, used as a key growth metric in funding rounds.