Startup Fundraising Glossary

Navigate the world of startup financing with confidence

Explore a glossary of essential terms in startups, startup fundraising, bootstrapping and entrepreneurship. Decode the terminology and jargon with ease.

  • Option Pool

    The Option Pool is shares of stock reserved for future issuance to employees and consultants as part of their compensation.

  • Option Vesting Schedule

    The Option Vesting Schedule is the timetable over which startup employees or founders earn the rights to exercise their stock options.

  • Order Fulfillment

    Order Fulfillment is the complete process from the point of sale to delivery of a product to the customer.

  • Order-to-Cash Process

    The Order-to-Cash Process is the complete process involved in receiving and fulfilling customer orders, crucial for managing cash flow.

  • Organic Customer Acquisition

    Organic Customer Acquisition is the process of gaining customers naturally over time through word of mouth, customer satisfaction, and organic search traffic.

  • Organic Growth

    Organic Growth is expansion from a company`s own business activity, without acquisitions or significant external investment.

  • Organic Reach Expansion

    Organic Reach Expansion involves efforts to naturally increase the number of potential customers or users who encounter a startup`s marketing without paid promotion.

  • Organic User Acquisition

    Organic User Acquisition involves gaining new users through non-paid efforts, such as word-of-mouth, social media sharing, and search engine optimization.

  • Organizational Agility

    Organizational Agility is the capability of a company to rapidly change or adapt in response to market changes.

  • Organizational Capital

    Organizational Capital refers to intangible assets related to the workforce, including knowledge, skills, and experience that contribute to a company`s value.

  • Organizational Design

    Organizational Design is the process of shaping a company`s structure and roles to align with its business strategy and goals.

  • Organizational Restructuring

    Organizational Restructuring is the process of changing the organizational structure or business model of a startup to improve efficiency, focus, or growth potential.

  • Organizational Scalability Plan

    An Organizational Scalability Plan is a strategic blueprint for growing a startup`s structure, resources, and processes to accommodate future expansion.

  • Original Issue Discount (OID)

    The Original Issue Discount (OID) is the difference between the original face value and the actual price paid for a bond or other debt instrument.

  • Out-licensing

    Out-licensing is the practice of licensing proprietary technology, processes, or products to other companies for use.

  • Out-of-Box Thinking in Financing

    Out-of-Box Thinking in Financing involves innovative or unconventional approaches to raising capital that diverge from traditional methods, such as crowdfunding or token sales.

  • Out-of-the-Box Solutions

    Out-of-the-Box Solutions are innovative and creative solutions that deviate from conventional strategies or methods.

  • Out-of-the-Money Option

    An Out-of-the-Money Option is an option with an exercise price that is not favorable compared to the current market price of the underlying asset.

  • Outbound Investor Outreach

    Outbound Investor Outreach involves proactive efforts by a startup to connect with potential investors through direct communication channels.

  • Outbound Marketing

    Outbound Marketing involves traditional marketing methods such as TV ads, direct mail, and cold calling to reach potential customers.

  • Outbound Sales

    Outbound Sales involves the practice of sales teams initiating customer engagement through direct outreach methods like cold calling or emailing.

  • Outbound Sales Strategy

    An Outbound Sales Strategy is a proactive approach to selling where a company initiates customer contact through methods like cold calling or emailing.

  • Outgrowth Expansion Strategy

    An Outgrowth Expansion Strategy involves planning and executing the expansion of a startup`s products, services, or market presence beyond its original scope.

  • Outperformance Benchmarking

    Outperformance Benchmarking involves setting performance targets for a startup that exceed industry averages or competitor achievements to attract investment.

  • Output-driven Funding

    Output-driven Funding involves investment strategies focused on achieving specific business outcomes or milestones before additional funding is released.

  • Outreach Strategy Optimization

    Outreach Strategy Optimization is the process of refining methods and channels used to connect with potential investors, customers, or partners to maximize engagement.

  • Outright Purchase

    An Outright Purchase involves acquiring an asset by paying the full amount upfront without financing.

  • Outsource Partner Evaluation

    Outsource Partner Evaluation is the process of assessing potential third-party vendors or partners for outsourcing specific business functions.

  • Outsourced Development

    Outsourced Development refers to using external resources or firms to perform business or project tasks, often to reduce costs or access specialized skills.

  • Outsourcing Efficiency

    Outsourcing Efficiency assesses the effectiveness of using external service providers to perform tasks, often to reduce costs or access specialized skills.

  • Outsourcing Efficiency Assessment

    Outsourcing Efficiency Assessment involves evaluating the cost-effectiveness and productivity of outsourcing various business functions or projects.

  • Outsourcing Strategy

    An Outsourcing Strategy is the plan for utilizing external organizations to perform tasks or functions traditionally handled internally.

  • Over-the-Counter (OTC) Trading

    Over-the-Counter (OTC) Trading is trading that occurs directly between parties without the use of a formal exchange.

  • Overcapitalization

    Overcapitalization is the condition where a company has issued more debt and equity than its assets are worth, leading to diluted earnings per share or financial strain.

  • Overfunding

    Overfunding occurs when a crowdfunding campaign raises more money than the initially stated goal.

  • Overhead Cost Allocation

    Overhead Cost Allocation is the method used to distribute overhead costs to different departments or products based on relevant criteria.

  • Overhead Cost Analysis

    Overhead Cost Analysis involves examining a startup`s fixed costs not directly linked to product or service production to identify savings or efficiencies.

  • Overhead Expenses

    Overhead Expenses are ongoing expenses of operating a business that are not directly associated with producing goods or services.

  • Overhead Rate

    The Overhead Rate is the ratio of overhead costs to the revenue or labor hours, used to allocate overhead to products or projects.

  • Overhead Reduction

    Overhead Reduction involves strategies implemented to decrease the ongoing expenses not directly tied to the production of goods or services.

  • Oversubscribed

    Oversubscribed occurs when the demand for a company`s stock offering or investment opportunity exceeds the available supply.

  • Owner Financing Agreement

    An Owner Financing Agreement is a financing arrangement where the seller of a business provides a loan to the buyer, often used in the sale of small businesses.

  • Owner`s Equity

    Owner`s Equity is the total value of assets owned by the entrepreneur after all liabilities have been subtracted.

  • Ownership Concentration

    Ownership Concentration is the extent to which a company`s shares are held by a small number of shareholders, potentially influencing control and decisions.

  • Ownership Concentration Risk

    Ownership Concentration Risk is the potential for issues arising from a startup having a large percentage of its equity held by a small number of investors.

  • Ownership Dilution

    Ownership Dilution is the reduction in existing shareholders` ownership percentage due to the issuance of new shares.

  • Ownership Equity Analysis

    Ownership Equity Analysis involves the examination of the distribution of company equity among founders, investors, and employees to ensure fairness and motivation.

  • Ownership Rights

    Ownership Rights are the legal rights that come with owning shares in a company, including profit entitlement and voting in shareholder meetings.

  • Ownership Structure

    The Ownership Structure is the arrangement of a company`s ownership, including the distribution of shares and voting rights among shareholders.

  • Ownership Structure Optimization

    Ownership Structure Optimization involves adjusting the distribution of equity to balance control, incentive, and financial returns among founders and investors.