The bunch glossary

ARR (Annual Recurring Revenue)

The amount of revenue a company can expect to earn on an annual basis from recurring sources, such as subscriptions or contracts.

Anchor Investor

A major early investor whose large commitment helps launch a fund and attract additional investors.

Angel Investor

An individual who invests personal funds in early-stage startups in exchange for equity or convertible debt.

Bridge Financing

Short-term funding used to meet immediate cash needs until longer-term financing or a liquidity event occurs.

Bridge Round

A temporary financing round used to provide a company with enough capital to reach the next funding stage or major milestone.

CLA (Convertible Loan Agreement)

A legal agreement outlining the terms under which a loan will be converted into equity in a company, typically during a future financing round.

Cap Table

A document that displays the ownership structure and equity holdings of a company, including common stock, preferred stock, and options.

Cap/Uncapped

A cap is a limit on the maximum valuation at which a convertible note will convert into equity, while uncapped means there is no limit.

Co-Investors

Investors who invest in the same company or project alongside a lead investor.

Common/Preferred Stock

Common stock represents ownership in a company with voting rights, while preferred stock represents ownership with priority claims on dividends and assets but usually no voting rights.

Down Round

A financing round in which a company raises capital at a lower valuation than in previous rounds, diluting existing shareholders' ownership stakes.

Equity

Ownership interest in a company, typically represented by shares of stock or other securities.

Equity Round

A financing round in which a company raises capital by issuing new shares of stock to investors.

Information Rights

The right of an investor to access information about the performance of a private equity or venture capital investment, including financial statements and other confidential data.

Investing

The act of allocating capital with the expectation of generating a return or profit.

Lead Investor

The primary investor in a private equity or venture capital funding round, often with a significant influence on the investment terms and structure.

Pre-Money/Post-Money Valuation

The value of a company before or after an investment is made, respectively.

Pro-Rata Rights

The right of an investor to maintain their proportional ownership stake in a company during subsequent funding rounds.

Right of First Refusal

The right of a party to purchase a certain asset or investment opportunity before it is offered to other parties.

Round Size

The amount of capital raised during a particular funding round of a private equity or venture capital investment.

Runway

The amount of time a company can sustain its operations with its current cash resources.

Scout

An individual or organization that provides early-stage investment or support to startups in exchange for equity or other forms of compensation, usually in the name of a larger VC-fund.

Search Fund

An investment vehicle that funds an entrepreneur to find, acquire and run a single privately held company.

Term Sheet

A document outlining the key terms and conditions of a potential investment, typically used as a basis for negotiations and due diligence.

VC (Venture Capital)

A type of private equity investment focused on providing funding and support to early-stage or high-growth companies with the potential for significant returns.

Valuation

The process of determining the value of an asset or business, often used to inform investment decisions or financial reporting.

Venture / Startup

A risky or speculative business or investment opportunity, often with the potential for high returns.

Venture Round

A funding round in which a venture capital firm invests in a company, typically in exchange for equity.