SEM

SEM (search engine marketing) is the practice of using paid search advertising to capture intent-based traffic from search engine results pages. It runs primarily through Google Ads and Microsoft Ads (Bing), with bidding done at the keyword or audience level and pricing set by auction. It is the paid counterpart to SEO in the broader category of search marketing; in modern usage, "SEM" is typically used to mean paid search specifically, even though the original umbrella definition included both paid and organic.

The terminology genuinely is a mess. Historically, "SEM" referred to all search marketing activity (paid + organic = SEO + paid search). Over the last decade, common industry usage has narrowed SEM to mean paid search only, with...

Founders Stock

Quick pointer: this entry covers the structural setup of founders stock at formation (vesting, repurchase rights, the RSPA, the share split). For the tax-advantaged characteristics (QSBS treatment, 83(b) mechanics, the holding-period math), see [Founder Shares].

Founders stock is the common stock issued to founders at company formation, typically subject to vesting and company repurchase rights. Granted at a nominal purchase price reflecting the near-zero fair market value at formation, it is accompanied by an 83(b) election filed within 30 days to lock in tax treatment at grant-date value and start the long-term capital-gains holding clock immediately. It is the structural foundation of founder equity, and the choices made...

Down Round

A down round is a funding round raised at a lower valuation than the company's previous round. The lower price per share mechanically dilutes existing shareholders more than a flat or up round would and often triggers anti-dilution protections that adjust earlier preferred shareholders' conversion ratios to compensate for the lower price. Post-2022, down rounds have transitioned from rare and stigmatized to common and increasingly acceptable, but the underlying anti-dilution math still does real damage to founders and the option pool.

The 2025 down-round landscape:

Lead Investor

A lead investor is the firm that anchors a financing round by setting the valuation, writing the largest check, and taking a board seat. The lead can also be an individual, and the role spans valuation plus all core terms at the priced round. Other investors (called "followers") then participate at the terms the lead has negotiated.

In practice, the lead does the structural work of the round. They negotiate the valuation and term sheet with the founders, conduct the deepest diligence, draft (or instruct counsel to draft) the legal documents, coordinate other investors into the round, and usually join the board as a director or observer. Typical lead check sizes scale with stage: roughly $1 million to $3 million of a $4 million...

Bootstrap Startup

A bootstrap startup is a company built without outside equity investment, funded by founder savings, early revenue, and reinvested profit. Also called a bootstrapped startup, the term comes from the phrase "pull yourself up by your bootstraps" and refers to the financial self-reliance of the model, which allows the founders to retain full ownership and control of the business.

Bootstrapped companies trade slower growth for full ownership and decision authority, and the path often leads to a [Lifestyle Business] rather than a venture-scale exit. The founders own 100 percent of the equity (no dilution from investors), set their own pace, and pick their own customers and timelines, but they also fund every dollar of growth fr...

Equity Crowdfunding

Equity crowdfunding is raising small equity investments from many non-accredited investors via SEC-regulated online platforms. Platforms include Wefunder, Republic, StartEngine, NetCapital, and Microventures, enabled by the 2012 JOBS Act and operationalized through Regulation Crowdfunding (Reg CF, effective 2016) and Regulation A+ (Reg A, expanded 2015). It is distinct from reward-based crowdfunding (Kickstarter, Indiegogo) where backers receive products rather than equity, and from donation-based crowdfunding where contributors receive nothing. It is the funding mechanism that lets startups raise from their customer base and the broader public without the wealth-gate restrictions of traditional accredited-investor offer...

Capital Call

A capital call is the mechanism by which a venture fund draws committed capital from its Limited Partners as needed for investments or expenses. Also called a "drawdown," it applies across PE funds, real estate funds, and other private investment vehicles, typically over the first 4-5 years of fund life, with strict legal obligations on LPs to fund each call within the defined window (typically 10-30 days) and serious consequences for failure to fund. It is the operational mechanic that connects LP capital commitments to actual deployed capital, and one of the most important fund-administration concepts to understand.

The mechanic: LPs commit capital at fund formation but don't fund the commitment immediately. Instead, the GP i...

Share Buyback

A share buyback is a corporate action in which a company purchases its own shares from existing stockholders, reducing the outstanding share count. Also called share repurchase or stock buyback, the repurchased shares either become treasury stock or are canceled, used at public companies as a capital-return mechanism and at private companies as an employee/investor liquidity mechanism via tender offers. It is the corporate analog of an individual stockholder selling shares, with the company itself as the buyer.

The two main contexts:

Public-company buybacks:

• Authorization: board approves a buyback program with a defined authorization amount (e.g., "$2B share repurchase authorization") and timeline.
• Execution: company purchase...

Demo Day

Demo day is the event ending an accelerator program where each startup pitches a large invited audience of investors in 2 to 6 minutes. The audience also includes press, partners, and ecosystem players, and the pitch is designed to drive follow-up meetings and term sheets within the days and weeks after the event. It is the marquee fundraising moment for accelerator cohorts and has become a meaningful slice of the early-stage venture funding rhythm, often serving as the early-stage alternative to a traditional [Roadshow].

The format and major examples: Y Combinator demo day (the canonical version, originated 2005, now hosts the largest invited investor audiences for any accelerator; YC demo days have moved between in-person and rem...

Up Round

An up round is a funding round raised at a higher valuation than the company's previous round. It signals that the company has grown in value since the last financing and dilutes existing shareholders less per dollar raised than a flat or down round would. Up rounds are the default expectation in a healthy venture trajectory: each round prices the company higher than the last as it hits milestones, grows revenue, and demonstrates the path to the next milestone.

Typical step-up benchmarks (2025):