Pitch deck and startup fundraising glossary

Investors use a shared vocabulary. Using these terms correctly on your slides, and labelling numbers precisely, makes a deck easier to trust and compare.

A

Angel investor

An individual who invests their own money in early-stage startups, usually in exchange for equity or a convertible instrument.

ARR (annual recurring revenue)

The yearly value of subscription or contracted revenue that repeats, excluding one-off fees. Often calculated as MRR × 12.

B

Bridge round

A small round raised to extend runway until the next larger round or a milestone.

Burn rate

How much cash a company spends each month. Gross burn is total spending; net burn is spending minus revenue.

C

CAC (customer acquisition cost)

The total sales and marketing cost of winning one new customer over a period, divided by the customers won.

Cap table

A table showing who owns what share of a company, including founders, investors, option pools and convertible instruments.

CCPS (compulsorily convertible preference shares)

Preference shares that must convert into equity shares at a future date or event; a common instrument for investment in Indian startups.

Churn

The share of customers or revenue lost over a period. Customer churn counts accounts; revenue churn counts money.

Cohort

A group of customers who started in the same period, tracked together to show retention and spending over time.

Convertible note

A short-term loan that converts into equity at a later round, usually at a discount or with a valuation cap.

D

Data room

An organised online folder of documents, such as financials, contracts and legal records, shared with investors during due diligence.

Dilution

The fall in an existing shareholder’s percentage ownership when the company issues new shares.

Discount rate

In a SAFE or convertible note, the percentage reduction on the next round’s share price that early investors receive when they convert.

DPIIT recognition

Recognition of a company as a startup by India’s Department for Promotion of Industry and Internal Trade, which gives access to Startup India benefits and schemes.

Due diligence

The checks an investor carries out before investing, covering the team, product, market, finances, legal standing and references.

E

Elevator pitch

A summary of your business short enough to say in about 30 seconds.

Exit

The way investors eventually turn their shares into cash, usually an acquisition or a public listing.

G

Go-to-market strategy

The plan for reaching customers and selling to them: channels, pricing, sales process and early target segments.

Gross margin

Revenue minus the direct cost of delivering the product or service, shown as a percentage of revenue.

L

Lead investor

The investor who sets the terms of a round, usually takes the largest share and often joins the board.

LOI (letter of intent)

A written, usually non-binding, statement from a potential customer or partner that they intend to buy or work with you.

LTV (lifetime value)

The total gross profit a company expects to earn from one customer over the whole relationship.

LTV:CAC ratio

Lifetime value divided by customer acquisition cost; shows whether customers are worth what it costs to win them.

M

Milestone

A specific, measurable goal the company plans to reach, such as a revenue level, product launch or number of customers.

MOIC (multiple on invested capital)

How many times an investor’s money is returned; a 5x MOIC returns five times the amount invested.

MRR (monthly recurring revenue)

The monthly value of subscription or contracted revenue that repeats.

MVP (minimum viable product)

The simplest version of a product that lets you test whether customers want it.

N

Net revenue retention (NRR)

Revenue this period from customers you had a year ago, including expansion and minus churn, as a percentage of their revenue then.

O

Option pool (ESOP)

Shares set aside to grant to future employees as stock options.

P

Payback period

How many months it takes for a customer’s gross profit to repay what it cost to acquire them.

Pitch deck

A short slide presentation that explains a startup to investors: problem, solution, market, traction, team and the funding ask.

Post-money valuation

The company’s value immediately after new investment, equal to the pre-money valuation plus the amount invested.

Pre-money valuation

The value agreed for a company before new investment is added.

Pre-seed

The earliest funding stage, often before a product or revenue, typically from founders, friends, angels and accelerators.

Pro rata right

An investor’s right to invest in later rounds to keep their percentage ownership.

Product-market fit

The point at which a product satisfies a clear market need well enough that customers keep using it and recommend it.

R

Runway

How many months a company can operate before running out of cash at its current burn rate.

S

SAFE (simple agreement for future equity)

An agreement where an investor pays now and receives shares at a future priced round, usually with a valuation cap or discount.

SAM (serviceable addressable market)

The part of the total market your product can actually serve, given its features, geography and channels.

Seed round

An early funding round used to find product-market fit and build early traction.

Series A

Usually the first large priced equity round from venture capital funds, raised once a company shows repeatable growth.

SOM (serviceable obtainable market)

The share of the serviceable market you can realistically win in the next few years.

T

Tagline

A short line that says what the company does, usually shown on the title slide.

TAM (total addressable market)

The total annual revenue available if every possible customer bought your product.

Term sheet

A short, mostly non-binding document setting out the main terms of an investment before final legal agreements.

Traction

Evidence that customers want your product, such as revenue, users, growth, retention, pilots or signed contracts.

U

Unit economics

The revenue and costs of a single unit, such as one customer or order, used to judge whether the business can be profitable at scale.

Use of funds

How a company plans to spend the money it is raising, usually split into a few categories with percentages.

V

Valuation cap

The maximum valuation at which a SAFE or convertible note converts, which protects early investors if the company’s value rises sharply.

Venture capital (VC)

Investment from professional funds in high-growth private companies in exchange for equity, with the aim of large returns on exit.

Written by Gachi Foundation, a non-profit in Jharkhand, India. All pitch deck resources.