VC Terms Flashcards
409A Valuation
A third party valuation of a company’s common stock. Generally used by startup companies to help determine the exercise price for the company stock options.
ARPU
Average Revenue Per User
AOV
Average Order Value
ARRG Ratio
Average Recurring Revenue (ARR) / Growth rate
Accelerator
A program that provides the mentorship and capital necessary to accelerate the growth and success of young startups. Typically the program will provide some capital and in exchange will take an equity stake in the startup
Accredited Investor
An individual or institution that meets certain wealth criteria and if therefore deemed to be sophisticated enough to participate in private, Non -public investments.
Individual $200k per year (prior 2 years)
Spousal couple $300k per year (prior 2 years)
Individual or Spousal $1M Net worth
Corporation $5M in assets
Allocation
The size of the round that is set aside for a specific investor (can be a fund or group of investors), usually communicated in a dollar amount
Anchor Investor
First investor in a fund; can be also referred to as the lead investor
ARR
Annual Revenue Run Rate; the revenue for the last month multiplied times 12 months as an estimate of the total revenue rate for the year.
Angel investor
Wealthy individuals that invest in startups in their early stages of development or seed round of fundraising.
Due to the inherent risk of loss of capital or significant dilution in subsequent fundraising, angel investors typically pursue investments with returns that they believe may have the potential to return multiples of the initial investment.
