Valuation is the estimated worth of a company at a specific moment, calculated through multiple methods. Methods include comparables analysis (looking at recent transactions of similar companies), discounted cash flow (modeling future cash flows back to present value), market-based pricing (what the marginal investor will pay), asset-based methods (for asset-heavy businesses), and for early-stage startups, venture-style heuristics anchored on round dynamics, growth-stage benchmarks, and qualitative assessments of team, market, and momentum. It is the number that shapes every fundraising conversation, every employee equity grant, every acquisition discussion, and every founder anxiety about whether they're being underpriced or over...
Early exercise tax is the tax treatment of exercising stock options before they have vested. By default, the bargain element (FMV at vesting minus strike price) is ordinary income at each vesting event going forward (and AMT adjustment for ISOs), unless the holder files an 83(b) election with the IRS within 30 days of exercise to recognize income at the exercise date instead, when the bargain element is typically zero or small. It is the technical reason why early exercise without 83(b) is worse than not exercising, and why the 83(b) filing discipline is so important.
The tax mechanic of early exercise without 83(b):
Weighted-average anti-dilution is the modern standard anti-dilution provision in venture-backed preferred stock. It adjusts the conversion price of the preferred series downward when the company issues stock at a lower price, with the adjustment calculated by a formula that weighs the size of the down round against the total cap table to produce a partial (not full) adjustment. It is the more founder-friendly of the two main anti-dilution flavors and the default in modern venture term sheets, sitting between no protection (rare) and full-ratchet (investor-friendly, increasingly limited to distressed situations).
The weighted-average formula:
Enterprise value (EV) is the total value of a business including debt and excluding cash. Equity value is the shareholders' stake after debt is paid off and cash is netted out. Equity value is sometimes called market capitalization for public companies, or simply "equity value" in private M&A. The two are connected by a bridge calculation that determines what shareholders actually receive when a company is sold. The distinction is the difference between the headline acquisition price (often quoted in EV terms) and the actual amount that flows to shareholders.
The standard bridge calculation: Equity Value = Enterprise Value - Debt + Cash - Other Adjustments (transaction expenses, working-capital adjustme...
Minimum lovable product (MLP) is an evolution of MVP that emphasizes shipping something users love at launch, not just the bare minimum that works. It favors a polished, emotionally resonant, focused product even at the cost of breadth, arguing that in crowded markets a working-but-uninspiring MVP produces no traction even when the underlying value proposition is sound. The term was popularized in the late 2010s by Henrik Kniberg (Spotify, "The Skateboard, not the Wheel" analogy) and Jiaona Zhang (writing in product-leadership communities like Reforge and Lenny's Newsletter).
The MLP critique of classical MVP runs like this: Eric Ries's MVP was designed for the lean-startup era of 2010-ish, when product expectations ...
Bookings, revenue, and cash are three distinct financial measures B2B SaaS founders frequently conflate, each telling a different story about the business. Bookings is what was signed (sum of TCVs of deals closed in the period), revenue is what was earned (the portion of contracts recognized under accounting rules), and cash is what hit the bank account (actual collected money in the period). A company can have a great bookings quarter, mediocre revenue, and weak cash collections all in the same three months. Investors, accountants, and operators each emphasize a different one.
The three measures, side by side:
| Measure | What it captures | When it's recognized | Used by |
|---|---|---|---|
| Bookings | TCV of all deals signed | Day the c... |
An escrow holdback is a portion of acquisition proceeds held in a third-party escrow account for 12 to 24 months after closing. Also called an escrow, the funds are available to cover potential indemnification claims by the buyer for breaches of representations and warranties, working capital adjustments, or other deal protections, and released to sellers at the end of the survival period if no qualifying claims have been made. It is the most-common mechanism for backing seller indemnification obligations and the structure that determines when founders actually receive their full proceeds.
The standard structure: escrow size is typically 5 to 15 percent of deal value (sometimes higher for deals with significant risk areas, o...
A tranche is a portion of a total financing commitment released contingent on the company achieving specific defined milestones. From the French for "slice," milestones include revenue thresholds, product milestones, customer counts, or regulatory approvals. It is used in venture debt arrangements, structured equity rounds, and occasionally traditional venture rounds to manage investor risk by tying capital release to performance rather than releasing the full commitment at closing. It is a structural mechanic that protects investors at the cost of company flexibility, and a feature founders should generally negotiate against.
The common contexts where tranching appears:
A recapitalization is a restructuring of a company's capital structure that changes who owns what without necessarily changing operations. Also called a recap, the restructuring covers the mix of debt, equity, share classes, and ownership distribution. It is sometimes used as an alternative to a full exit when founders want partial liquidity, when early investors want to recycle capital, or when private equity wants to take a meaningful stake while keeping the company independent. It is the middle ground between staying private and selling outright.
The major recap structures: leveraged recapitalization (the company takes on new debt to pay a dividend to shareholders or to repurchase shares, returning capital to existing ho...
A follow-up email is the post-pitch email sent to an investor within 24 hours that summarizes the meeting, answers questions, and proposes a next step. Ideally sent within a few hours, it attaches any materials the investor requested and addresses specific questions raised in the meeting, used to maintain fundraising momentum and stand out from the majority of founders who follow up poorly or not at all. It is one of the most-leveraged 30 minutes of work in any fundraise and one of the easiest places to differentiate.
The structure of an effective post-pitch follow-up: opening sentence ("Thanks for the time today" plus one specific thing from the conversation that signals you were listening), summary of the meeting (one or t...