Fundraising and Equity Terms

An accelerator is designed for startups, and it represents a business support program offering education, mentorship and financing. Companies enter accelerators for a fixed period and as a part of a cohort of businesses. Besides receiving knowledge through mentorship customized to the specific vertical of the startup, it is also a good networking opportunity. It creates value by introducing innovative ideas and people to each other, which results in business support as an outcome of their social network structure. It is an option through which early-stage companies can scale their businesses, benefit from various resources, and accelerate their growth.

Also known as M&A (mergers and acquisitions), it represents the action of a company acquiring another one, for various reasons. The structure of this action breaks down the enterprise value.

An Advanced Subscription Agreement (ASA), similar to Simple Agreement for Future Equity (SAFE) is a financial instrument used to raise capital for early-stage startups and companies. It is a form of fundraising that allows businesses to secure investment from investors without setting an exact valuation for the company at the time of investment. Widely utilized in the UK and Europe, it seamlessly aligns with diverse tax relief schemes such as SEIS (Seed Enterprise Investment Scheme) and EIS (Enterprise Investment Scheme).

Agricultural technology refers to the use of technological innovations that solve pain points in agriculture. It aims to increase efficiency and profitability by using big data, AI, robotics or other methods necessary to scale this industry.

An anchor investor is an institutional investor. They enter the game right before an IPO (Initial Public Offering) and they are seen as a booster for companies looking for a successful listing. One or multiple entities can join forces and become such an investor.

Angel investors are independent private investors who aim to finance and support businesses they believe in. They are one of the most important and impactful investors, especially in the early stages of a startup.

Annual recurring revenue (ARR) refers to all ongoing revenue for a product or business, projected over one year. It is determined by multiplying the difference between the Monthly Recurring Revenue and Monthly Recurring Revenue Churn (MRR - MRR Churn) by 12 (months). See the definitions of MRR and MRR Churn.

In this case, shares are issued at a lower price than the price per share that was paid by the existing shareholder. This is achieved by granting such existing investors the right to receive additional shares (referred to here as “anti-dilution shares'').

AI refers to the simulation of human intelligence (or human-like traits such as problem-solving) in machines. It often entails the ability of a machine to perform tasks (such as sorting data) or make decisions on its own.

ARPU is the total revenue that a business can expect to generate from each user. It’s calculated by dividing the total revenue by its total number of users over a period. This economic metric is important because it allows you, and your investors, to see how effective your company is monetizing its product. This metric is often used with social media and phone service companies.