Charter is a blanket term that describes a corporation’s primary governing document. In Delaware this document is the “Certificate of Incorporation,” in Texas it’s the “Certificate of Formation,” and in California it’s known as the “Articles of Incorporation.”
A Cross-Fund Investment is when a venture capital firm operates more than one fund and more than one fund invests in the same company.
Control terms are terms that allow a VC to exert positive or veto control in a deal.
A Commitment Period is the length of time a VC fund has to find and invest in new companies, usually five years.
A Cockroach is a startup that builds slowly and spends carefully, minimizing risk so that it can survive doomsday scenarios and live to fight another day. A Cockroach isn’t as attractive as a Unicorn, but it is more likely to […]
A transaction or series of transactions whereby a startup raises investment dollars (or “capital”) to grow the company. Capital raises can be debt, convertible debt, or equity.
A venture fund that collects all investments from its investors (oftentimes referred to as “limited partners” or “LPs”) up front, as opposed to a one deal at a time or capital call structure.
Customer Acquisition Cost (CAC) is the cost to acquire a new customer. CAC can be calculated by dividing the total costs associated with acquisition by the total new customers, within a specific time period.
Corporate Governance is the manner in which an entity is governed and regulated. The term is used across all entity types – corporations, LLCs, and partnerships. Corporate governance documents include the certificate of formation/incorporation and bylaws for a corporation, and […]
A Convertible Note is short-term debt that converts into equity, typically in conjunction with a financing round. By using a convertible note, the investor would be loaning money to a startup, and instead of a return in the form of […]