Prompt engineering is the practice of crafting effective input prompts to large language models to elicit desired outputs. It encompasses techniques like clear instructions, few-shot examples, structured output specifications, chain-of-thought reasoning, role assignments, context provision, and iterative refinement. The discipline is part craft (intuition for what works) and part science (testable techniques), and is the dominant way to control LLM behavior without fine-tuning. It's the AI-era equivalent of writing good SQL queries: a transferable skill that materially impacts the quality of what you can build.
The core techniques that work:
Clear, specific instructions: vague prompts produce vague outputs.
Bad: "Summariz...
The Transformer is the neural network architecture introduced in Google's 2017 paper "Attention is All You Need" that now powers virtually every modern foundation model. It replaced earlier sequence-processing approaches (RNNs and LSTMs) and underlies GPT, Claude, Gemini, Llama, BERT, T5, and others. Its core innovation is the self-attention mechanism, which allows the model to consider all positions in a sequence simultaneously rather than processing them sequentially. It's the architectural breakthrough that enabled the modern AI revolution; understanding it (at least conceptually) is foundational vocabulary for anyone in tech.
The pre-Transformer era:
RNNs (Recurrent Neural Networks) and LSTMs (Long Short-Term Me...
A party round is a financing round with many small investors (typically 10 or more checks all under $250K) and no single lead investor. It is common at seed and pre-seed stages when founders pull together capital from a wide angel network rather than concentrating on a single institutional check. It is distinct from traditional lead-investor-led rounds where one investor anchors the round with majority of the capital and sets the terms. The term carries a mildly pejorative connotation among institutional investors, suggesting the founder couldn't attract a serious lead.
The structural reality: party rounds typically involve 10-30+ individual angels and small institutional investors each writing $10K-$100K checks, totaling $500K-...
A shareholder agreement is a private contract among a corporation's shareholders governing share transfers, board elections, and shareholder votes on major decisions. Sometimes called a stockholders' agreement, it often includes the corporation itself as a party and supplements the bylaws with contractual obligations that bind only the signing parties. Provisions typically cover transfer restrictions, drag-along and tag-along rights, board representation, voting agreements, information rights, preemptive rights, and dispute resolution. Unlike bylaws, which govern the corporation and apply to all shareholders by default, a shareholder agreement is a contract that binds only the parties that sign it.
The major provisions...
How startups end (and what determines who gets what). This cluster covers the major exit paths (IPO, acquisition, SPAC, direct listing), deal structures and terms (LOI, definitive agreement, earnout, holdback, reps and warranties), the rights that affect exit outcomes (drag-along, tag-along, ROFR, lockup), and the mechanics specific to exits (liquidation waterfall, exit multiples, QSBS). 26 entries.
Exits are the moment when years of equity decisions become real money. Founders should know this vocabulary years before they need it.
A business cofounder is the founding-team member responsible for non-technical functions: customer development, sales, fundraising, business model design, go-to-market, recruiting, and operations. They often (but not always) serve as the CEO, hold founder-level equity (typically 25-50% in two-founder teams), and bring skills that complement the technical cofounder's product-building capabilities. The role is controversial in startup discourse because the value-add is often less visible than a technical cofounder's "they built the product" contribution. It is the most-debated cofounder role in startup culture: dismissed by some as the "idea guy" or "BizDev person" who isn't actually building anything, defended by others as...
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...
SOC 2 (Service Organization Control 2) compliance is a security and operational controls certification administered by the AICPA. It evaluates a company's controls across five Trust Service Criteria: security, availability, processing integrity, confidentiality, and privacy. SOC 2 Type II reports (the standard enterprise-grade certification) require documented policies and procedures, implemented controls, an external audit by a CPA firm, and ongoing maintenance. SOC 2 is widely required as a prerequisite for selling to enterprise customers in regulated industries (healthcare, financial services) and increasingly across all enterprise software. It's the certification that gates many enterprise sales conversations.
The two S...
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...
Management fee is the annual fee a venture fund charges its Limited Partners to cover operating expenses of the GP firm. It is typically structured as 2% of committed capital during the fund's investment period (years 1-5) and steps down to 1-1.5% during the harvest period (years 5-10), paid regardless of fund performance. It is the primary cash income for VC firms during the years before exits start generating carried interest, the cash flow that pays VC partner salaries, supports firm operations, and lets VCs maintain the discipline of long-term portfolio focus without near-term financial pressure.
The structure: a $200M fund with 2% management fees generates $4M annually in management fee income during the investment perio...