All memos tagged #startup-lexicon

The traditional forms of venture capital are the three instruments through which startups have conventionally issued ownership or rights to investors: common stock, convertible notes and their...

The Venture and Startup Glossary is a collection of terms used in building, financing, and operating startups and venture-backed companies. It gives founders, operators, and investors a shared...

Specialized Digital Micro Tasks are the small, tool-specific tasks that make up many jobs today, each requiring some combination of education, training, and problem-solving experience. The term is...

An Inevitable Unicorn is a venture-backed company that John Zdanowski believes will someday be worth more than $1 billion. "Unicorn" is venture capital shorthand for a private startup valued at $1...

A Profitable Owned Channel is a sales channel that generates leads for a business while also generating cash from related Profitable Revenue Streams. The term builds on the marketing distinction...

Portfolio Companies is the name John Zdanowski and his partners use for all of the businesses and partnerships they support in any capacity. In venture capital and private equity, a portfolio company...

An Entrepreneur is a person who organizes and operates one or more businesses, taking on greater than normal financial risk in exchange for a share of the rewards. The word is French, from...

Branded Venture Capital is investment chartered to grow the ecosystem of a platform or brand, in which the sponsor contributes its brand, audience, and distribution alongside or in place of capital...

Eat the Work describes companies that centralize and systematize the management of distributed labor, performing core parts of a professional's work so the professional can concentrate on more...

Management Fee Plus Carry is the compensation structure of the general partners who raise and run venture capital, private equity, and hedge funds: an annual management fee charged on the size of the...

The Rule of 40 is the principle that a software company's combined growth rate and profit margin should exceed 40%, a high-level gauge of health used widely in venture capital and growth equity. The...

A keiretsu is a Japanese business network of companies bound together by interlocking business relationships and cross-shareholdings, traditionally organized around a core bank. Member companies each...

A Strategic Transaction is a company-defining transaction that changes a company's ownership, capital structure, or scope, most commonly raising capital, acquiring a company, or selling the company....

A virtual cap table is a method of keeping track of contributions to a startup before it exists.[1] Each member of the team decides how much time they can contribute and what their “full time rate“...

A Venture Activist is a next-generation accelerator, incubator, and angel network that empowers the next generation of non-venture-backed startups. The term names an organization that combines the...

Stock Options are the traditional way that venture-backed companies enable employees to build equity in a company. A stock option is the right, but not the obligation, to purchase a certain stock at...

A Profitable Revenue Stream is a method of generating revenue that generates more money than it costs to create. It is the fundamental unit of an operating business. To be a profitable revenue stream...

Micro-Private Equity is the practice of acquiring small businesses, often in distressed situations, and operating them through recovery: the private equity model of buying and improving operating...

Ways that the company can issue stock options Purchase common stock as a founder everyone else subject to vesting. A grant of restricted stock at the formation of a company. A grant of stock options....

Fully Diluted Shares Outstanding is the count of a company's common shares that would exist if every security able to become common stock, such as convertible notes and bonds, preferred stock,...