Startup Fundraising Glossary

Navigate the world of startup financing with confidence

Explore a glossary of essential terms in startups, startup fundraising, bootstrapping and entrepreneurship. Decode the terminology and jargon with ease.

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Resource AllocationResource Allocation refers to the strategic deployment of resources within a startup to achieve its objectives, including financial, human, and material resources.Resource EfficiencyResource Efficiency measures how effectively a startup uses its resources, including time, money, and materials, to achieve its objectives and maximize output.Resource MobilizationResource Mobilization is the process of securing and deploying financial, human, and material resources necessary for a startup to achieve its strategic objectives.Resource-Based View (RBV)A Resource-Based View (RBV) is a management tool used to determine the strategic resources available to a company, aiming to gain a competitive advantage.Restricted StockRestricted Stock refers to shares granted to company insiders with limits on their sale or transfer, subject to vesting conditions.Retained EarningsRetained Earnings are the portion of a company`s profits not distributed as dividends but reinvested in the business or held as reserves.Retention RateThe Retention Rate measures the percentage of customers or users who continue to use a service over a specific period, indicating customer satisfaction and loyalty.Retention StrategyA Retention Strategy is a company`s approach to keep its customers or employees engaged and satisfied over time, aiming to reduce churn and build long-term relationships.Retroactive FinancingRetroactive Financing refers to funding provided for expenses already incurred, often as a way to cover past operational costs or complete projects already underway.Return on Assets (ROA)Return on Assets (ROA) measures how effectively a company uses its assets to generate profit, calculated as net income divided by total assets.Return on Customer Acquisition Cost (ROCAC)Return on Customer Acquisition Cost (ROCAC) measures the profitability and value generated from customers acquired through marketing efforts, comparing revenue to the cost of acquisition.Return on Equity (ROE)Return on Equity (ROE) measures a corporation`s profitability by revealing how much profit a company generates with the money shareholders have invested.Return on Innovation Investment (ROII)Return on Innovation Investment (ROII) quantifies the financial gains or losses generated by investments in innovation activities relative to the costs of those activities.Return on Investment (ROI)Return on Investment (ROI) measures the gain or loss generated on an investment relative to the amount of money invested, indicating the efficiency of the investment.Return on Sales (ROS)Return on Sales (ROS) is a ratio used to evaluate a company`s operational efficiency, calculated as net income divided by total sales, indicating how much profit is generated from sales.Revenue AccelerationRevenue Acceleration refers to strategies and actions taken to increase the rate of revenue growth, often through sales and marketing optimization.Revenue ConcentrationRevenue Concentration measures the degree to which a company`s revenue is derived from a limited number of customers or products, indicating potential risk exposure.Revenue Cycle ManagementRevenue Cycle Management is the process of handling the financial transactions from customers, including billing, collections, and revenue recognition, to optimize a company`s revenue flow.Revenue DiversificationRevenue Diversification is a strategy to increase income sources through new products, services, or markets, reducing dependence on a single revenue stream.Revenue Growth RateRevenue Growth Rate measures the increase in a company`s sales from one period to the next, indicating the pace at which the company is expanding its business operations.Revenue ModelA Revenue Model describes the framework for generating financial income. It identifies which revenue source to pursue, what value to offer, how to price the value, and who pays for the value.Revenue Per Available Seat Mile (RASM)Revenue Per Available Seat Mile (RASM) is a metric used primarily in the airline industry to assess how efficiently a company generates revenue from its available seat capacity.Revenue Per User (RPU)Revenue Per User (RPU) is a metric that calculates the average revenue generated per user or customer, used to assess a company`s financial performance and business model efficiency.Revenue Run RateRevenue Run Rate projects future revenue over a period, based on current financial data, to estimate annual earnings.Revenue SharingRevenue Sharing is a financial arrangement where revenue generated by a business is shared with partners or stakeholders, often used in collaborative business models.Reverse MergerA Reverse Merger is a strategy where a private company becomes public through a merger with a dormant or shell public company, bypassing the traditional IPO process.Reverse VestingReverse Vesting is a mechanism where a company has the right to buy back shares from an employee or founder at a nominal price if the individual leaves the company before a set period.Rights IssueA Rights Issue is a corporate action to raise equity capital, where existing shareholders are given the right to subscribe to new shares at a discount before they are offered to the public.Rights Issue PremiumRights Issue Premium refers to the additional amount that shareholders are required to pay to exercise their rights in a rights issue, over the par value of the shares.Rights of First Refusal (ROFR)Rights of First Refusal (ROFR) is a contractual right that gives its holder the opportunity to enter a business transaction with a company before the company can transact with others.Rights OfferingA Rights Offering is a way for companies to raise capital by giving existing shareholders the right to purchase additional shares at a discount, before offering them to the public.Risk AllocationRisk Allocation involves distributing the potential risks associated with a project or investment among different parties, often outlined in contracts or agreements.Risk AppetiteRisk Appetite is the level of risk that an organization or individual is willing to accept in pursuit of its objectives, guiding decision-making in investments and strategic planning.Risk AssessmentRisk Assessment is the process of identifying, analyzing, and responding to risk factors throughout the life of a project or business.Risk CapitalRisk Capital refers to funds invested in high-risk, high-reward projects, typically in the early stages of a startup`s development.Risk Capital AllocationRisk Capital Allocation is the strategy of assigning and investing funds in high-risk, high-reward ventures, often a critical component of venture capital and startup investment portfolios.Risk Capital AssessmentRisk Capital Assessment evaluates the amount of money that can be risked on new ventures without jeopardizing a company`s financial health.Risk DiversificationRisk Diversification involves spreading investments across various assets to reduce exposure to any single risk, enhancing the resilience of a startup`s financial portfolio.Risk ManagementRisk Management involves forecasting and evaluating financial risks together with the identification of procedures to avoid or minimize their impact.Risk MitigationRisk Mitigation involves strategies and actions taken to reduce and manage risks to a project or business, aiming to minimize the potential impact of threats.Risk ProfileA Risk Profile is an evaluation of an individual`s or organization`s willingness to take risks, as well as their financial ability to handle the consequences of those risks.Rogue SpendingRogue Spending refers to unauthorized or unplanned spending within an organization, often bypassing formal procurement processes.ROI AnalysisROI Analysis is the process of calculating the return on investment for a particular expenditure or project, helping stakeholders understand the potential benefits relative to costs.Roll-Up StrategyA Roll-Up Strategy involves acquiring and merging multiple smaller companies in the same industry to consolidate market share, reduce competition, and achieve economies of scale.Rolling BudgetA Rolling Budget is a financial plan that is continuously updated by adding a new period (month, quarter, etc.) as the current period concludes, ensuring constant financial planning foresight.Rolling CloseA Rolling Close is a fundraising strategy where a startup closes funding rounds in stages, allowing it to secure capital as it meets specific milestones.Rolling ForecastA Rolling Forecast is a financial forecasting approach that updates predictions regularly, extending the forecast period as time progresses, to reflect the latest data.Rollout StrategyA Rollout Strategy is the plan for gradually launching a new product or service to the market, detailing the phases, timelines, and marketing efforts to maximize impact and adoption.Rollover for Business Startups (ROBS)A Rollover for Business Startups (ROBS) allows aspiring entrepreneurs to invest retirement funds into a new business without early withdrawal penalties or taxes.Round Financing DynamicsRound Financing Dynamics refer to the changing conditions, expectations, and strategies that influence each round of startup financing, from seed stage to later rounds.