Glossary

Angel (aka Angel Investor)

An angel investor is an individual investing his or her own funds into startups with investment typically in the range of $25k-250K. Angel investors are more likely to invest into early stage startups compared to venture capitalists. Many angel investors operate through an angel group or network.

Angel Round

A round of funding that is led by an individual angel investor or a group of angels.

Convertible Note

A common debt instrument that converts to equity in the future, typically at a discount rate. A conversion cap might be set to limit the purchasing power of a convertible note holder.

High Growth Business

A business that targets a large market and has an opportunity to get to IPO. (See also: Lifestyle Business)

Lean Startup

A methodology for developing businesses and products first introduced in 2011 by Eric Ries. Official site for Lean Startup movement.

Lifestyle Business

A business that generates enough revenue for its founder(s) but does not have an opportunity to grow very big. (See also: High Growth Business)

MVP

Minimum Viable Product is an early version of a product built as a basic vision and released to begin a learning process

Pivot

A change in the product made in an attempt to achieve a better product/market fit. A startup can go through many pivot points after introducing an MVP and before it achieves a product/market fit.

Smart Money

Funds that come with support and advisory from an investor.

VC (Venture Capital)

Capital provided by venture funds to early-stage, high-potential, high risk, growth startup companies.