Convertible debt is a type of financing instrument that combines features of both debt and equity. It is a form of debt that can be converted into equity, usually at the option of debt holder.

Seed capital is the initial financial support for budding entrepreneurs or startups to transform their innovative ideas into tangible business ventures.

Venture debt is a type of loan that is specifically designed for early-stage, high-growth companies with venture capital backing.

Defined as the process by which an individual earns the right to own or exercise certain assets, such as shares, options, or other forms of equity compensation, over a specified period.

Common stock is a tradeable asset or security that represents your ownership of a corporation's equity that’s normally attained by purchasing the company's shares.

Equity compensation is non-monetary pay that enables employees to receive a portion of ownership in the company and accept a lesser compensation as a result.

A pro rata basis refers to the proportional distribution or allocation of an amount, value, or benefit based on specific criteria, such as time or quantity.

A legally binding contract between two or more parties that outlines confidential material, knowledge, or information that the parties wish to mutually share for certain business purposes, but need to restrict access to and by third parties.

A person or organization that provides the largest amount of funding in a startup or investment round, typically taking a more active role in the company and influencing future investments.

A startup’s estimated value before it receives external financing. It is normally used to determine the percentage of ownership investors receive.

A letter of intent is a preliminary agreement between two or more parties indicating that they intend to enter a formal agreement.

When your startup cannot meet its financial obligations, such as debts and payables, to go with other expenses, it is known as insolvency.

A nonbinding document that summarizes a potential investment's fundamental terms and conditions, functioning as a blueprint for subsequent legally binding contracts.

A limited partner, or silent partner, is a partnership where one partner contributes financially to the startup but isn’t involved in daily operations.

An earnout arrangement is a sale structure based on future performance that benefits both you as a seller and the buyer.

A syndicate means an association of banks or other financial organizations that works together to underwrite and market new assets.

A stock option is a contract between two parties, such as your startup and employee, which gives the purchaser the right to purchase or sell company stocks at a set rate within a given time frame.

ROFR is an agreement that gives the holder the right to make the first offer or make a transaction with your startup before other interested parties.

An angel investor is an individual that believes in and invests in early-stage startups in exchange for equity.

An acquisition is a process in which one company buys most or all of another company's shares, assets, and/or other ownership interests. It can also refer to the purchase of an entire company.