oluwayinka
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7 key pre-seed fundraising terms every startup founder must know (based on YCombinator guide) :
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- Valuation (pre-money) - The value of a company prior to when investor money is added.
- Angel Investor - A (usually) wealthy private investor in startup companies.
- Equity Round - A financing round in which the investor purchases equity (stock) in the company.
- Common Stock - Capital stock typically issued to founders and employees, having the fewest, or no, rights, privileges and preferences.
- Preferred Stock - Capital stock issued in a company that have specific rights, privileges and preferences compared to the common stock. Convertible into common stock, either automatically (e.g., in an IPO) or at the option of the preferred stockholder (e.g., an acquisition).
- Convertible Note - This is a debt instrument that will convert into stock; usually preferred stock but sometimes common stock.
- Safe - Simple Agreement for Future Equity - Y Combinator’s replacement for convertible debt.
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