Reference
Pitch deck and fundraising glossary
Understand the finance, fundraising, and operating language used in investor presentations. Each definition explains the term in plain English, shows how founders use it in a pitch deck, and points to related concepts and real slide examples.
A
B
Bridge round
A bridge round is financing intended to carry a company from its current position to a specific later event, such as a larger priced round, profitability, an acquisition process, or a major product milestone. It can be structured as equity, convertible notes, or SAFEs. The phrase describes the purpose of the capital rather than one required legal instrument.
Burn rate
Burn rate describes how quickly a company uses cash, usually measured each month. Gross burn is total cash operating expense during the period. Net burn subtracts cash revenue collected, so it measures the actual decline in the cash balance. If a startup spends $500,000 and collects $200,000 in a month, its gross burn is $500,000 and its net burn is $300,000.
C
Capitalization table
A capitalization table, or cap table, is the record of who owns a company and which securities create that ownership. It typically lists founders, employees, investors, option pools, preferred shares, common shares, warrants, convertible notes, and SAFEs. A fully diluted cap table also models securities that have not yet converted or been exercised.
Customer acquisition cost (CAC)
Customer acquisition cost, or CAC, estimates the sales and marketing cost required to add a new customer. A basic calculation divides acquisition spending during a period by the number of customers acquired. A more complete calculation includes salaries, commissions, advertising, tooling, agency fees, and other costs associated with the acquisition team.
Customer lifetime value (LTV)
Customer lifetime value, or LTV, estimates the gross profit a company expects to earn from a customer over the relationship. A simple subscription version uses average revenue per account, gross margin, and expected lifetime derived from churn. More detailed models account for expansion, contraction, different customer segments, and the time value of money.
D
Demo day
A demo day is an event where a group of startups presents to investors, often at the end of an accelerator program. Despite the name, the presentation may be a short fundraising pitch rather than a live product demonstration. Formats vary from a few minutes on stage to prerecorded presentations and scheduled investor meetings.
Dilution
Dilution is the reduction in an existing shareholder’s ownership percentage when a company issues additional shares or securities that convert into shares. If a founder owns 60 percent before a financing and the new investors receive 20 percent of the post-money company, the founder’s percentage falls even though the number of founder shares may not change.
Down round
A down round is an equity financing completed at a lower company valuation than the previous priced round. It may happen when performance misses the earlier plan, public-market comparisons decline, the company needs capital urgently, or financing conditions tighten. The label refers to valuation, not necessarily to the amount raised.
G
L
M
P
Pre-seed round
A pre-seed round is very early financing used to turn a founder insight into initial product and market evidence. The label is informal and varies by ecosystem: one company’s pre-seed may resemble another company’s seed round in size or progress. Capital often comes from founders, angels, accelerators, and specialist pre-seed funds, commonly through SAFEs or convertible notes.
Product–market fit
Product–market fit describes a condition in which a defined group of customers receives enough value from a product that demand and retention become repeatable. It is not one universal metric or a permanent certification. Evidence depends on the business: consumer products may emphasize cohort retention and organic use, while enterprise software may emphasize renewals, expansion, and strong pull from a particular customer profile.
R
S
SAFE
A SAFE, or simple agreement for future equity, is a contract in which an investor provides capital now for the right to receive equity under specified future conditions. Unlike traditional debt, a standard SAFE generally has no maturity date or interest rate. Conversion is commonly shaped by a valuation cap, a discount, or both, and the exact mechanics depend on the document.
Seed round
A seed round finances the early work of finding and proving a repeatable business. Companies may already have a product, users, pilots, or revenue, but the definition varies widely by industry and market. Seed capital often funds product development, customer discovery, initial hiring, and evidence needed for a Series A.
Series A
A Series A is typically the first substantial institutional priced-equity round after a company has established meaningful early evidence. The exact threshold differs by business, but investors usually expect a defined customer, a product that delivers repeatable value, and signs that a larger distribution and operating system can be built.
Series B
A Series B is a growth financing for a company that has moved beyond initial product–market evidence and is building a repeatable organization. Investors generally expect stronger cohort history, a clearer acquisition engine, expanding economics, and a management plan for deploying considerably more capital.
Serviceable available market (SAM)
Serviceable available market, or SAM, is the portion of a total addressable market that a company can serve with its current product, geography, customer type, and business model. It narrows a broad TAM into the spending connected to the company’s actual category and constraints.
Serviceable obtainable market (SOM)
Serviceable obtainable market, or SOM, estimates the portion of a serviceable market a company could realistically capture over a defined period. It is smaller than SAM because it accounts for competition, distribution capacity, geography, sales cycles, supply, and the company’s own execution limits.
T
Term sheet
A term sheet is a summary of the principal economic and governance terms proposed for an investment. For a priced equity round, it often covers valuation, investment amount, liquidation preference, board composition, voting rights, option-pool treatment, anti-dilution provisions, pro rata rights, and closing conditions.
Total addressable market (TAM)
Total addressable market, or TAM, is the annual revenue opportunity if a product or category served all relevant demand under a defined set of assumptions. It describes the broad ceiling of the market, not the revenue a startup is likely to earn.
Traction
Traction is evidence that customers or users are responding to a product in a way that reduces market risk. It can include retained usage, revenue, signed contracts, transaction frequency, waitlist conversion, supply liquidity, or another behavior tied to the business model. Attention alone is not necessarily traction if it does not persist or lead toward customer value.