Fundraising glossary
Twelve terms you will hear while raising, each linked to the part of the guide where it comes up.
- Cap table
The breakdown of who owns what share of the company. A clean cap table with no surprises is one of the first things an investor checks before coming in.
in the guide: How long a round takes
- Data room
The organized folder with everything an investor will ask for in due diligence: metrics, legal, financials and contracts. Having it ready before you open the round saves weeks.
in the guide: How long a round takes
- Dilution
The share of the company you give up when new investors come in. Not bad in itself: a smaller slice of something much bigger can be worth more. What matters is what you get for it.
in the guide: Documents you need
- Lead investor
The investor who sets the round's terms and usually writes the biggest check. Having a lead is what gets everyone else to commit.
in the guide: The most expensive mistakes
- Pitch deck
The presentation you raise the round with. Not a brochure: the script that has to survive an investor's questions without you there to rescue it.
in the guide: How long a round takes
- Pre-money valuation
What the company is worth just before the round's money comes in. Add the investment and you get the post-money; from there comes the investor's percentage.
in the guide: The most expensive mistakes
- Pre-seed
The first round of outside money, before there are metrics to show. Decided on team, moat and timing, not on traction. It is the stage Suda invests at.
in the guide: Which round fits you
- Runway
The months of cash you have left at your current burn. It sets when the next round must close, which is why you raise with margin, not with your back to the wall.
in the guide: How long a round takes
- SAFE
An agreement to invest now for equity in the next round, without setting a valuation today. Fast and cheap, but the real dilution shows up later, so run the numbers before signing.
in the guide: Documents you need
- Seed
The round to go from a working product to a growing business. Here an investor already looks at retention and unit economics, not just the idea.
in the guide: Which round fits you
- Term sheet
The non-binding document where an investor proposes the round's terms: valuation, amount and rights. Signing it does not close the deal, but it sets the rules for what follows.
in the guide: How long a round takes
- Traction
The proof that someone wants what you make: usage, retention, revenue. An investor does not care that a chart goes up; they look at whether the growth is real and holds without spend pushing it.
in the guide: Which round fits you
