📄 Glossary of Key Terms in Entrepreneurial Finance


Building a successful startup requires fluency in the language of finance. This glossary equips you with essential terms to navigate the world of entrepreneurial fundraising and financial management:

  • Angel Investor: An affluent individual who invests their own money in early-stage startups with high growth potential.
  • Bootstrapping: Funding a startup with personal savings, credit cards, or revenue from early sales.
  • Burn Rate: The rate at which a startup spends its cash reserves.
  • Cash Flow: The movement of cash in and out of a business over a specific period. Positive cash flow indicates a healthy financial state.
  • Crowdfunding: Raising capital from a large number of people through online platforms.
  • Debt Financing: Borrowing money from a bank or other lender, which must be repaid with interest.
  • Due Diligence: The thorough investigation of a business by an investor before making an investment.
  • Equity Financing: Selling ownership shares in your company to investors in exchange for capital.
  • Financial Projections: Forecasts of a startup’s future revenue, expenses, and profitability.
  • Financial Modeling: The process of creating a mathematical representation of a company’s financial performance.
  • Initial Public Offering (IPO): The first time a company offers its shares to the public on a stock exchange.
  • Key Performance Indicators (KPIs): Measurable metrics that track a startup’s progress towards its goals.
  • Minimum Viable Product (MVP): A basic version of your product with enough features to gather validated learning from customers.
  • Pitch Deck: A concise presentation used to introduce your business concept to potential investors.
  • Return on Investment (ROI): The profit gained on an investment compared to the cost of the investment.
  • Seed Funding: Early-stage funding from angel investors or venture capital firms to help startups validate their concept and build an MVP.
  • Series A, B, C Funding: Stages of venture capital funding for startups with increasing investment amounts and stricter investor requirements at each stage.
  • Venture Capital (VC): Firms that invest in high-growth startups in exchange for equity ownership.

By understanding these key terms, you’ll be well-equipped to make informed financial decisions throughout your entrepreneurial journey.

Demystifying Startup Financing

Crafting Your Financial Plan

The Art of the Pitch: Securing Funding

Managing Your Startup’s Finances