Fundraising Glossary: Know the Lingo Before You Raise
Introduction
Getting ready to raise funds for your startup? Congrats! But before jumping into a roadshow marathon or pitching to a room full of VCs, you’ll need to speak the language of investors. In this article, we’ll break down the essential terms you need to know to navigate your Fundraising smoothly.
What Is Fundraising?
Fundraising is when you give up part of your company’s equity in exchange for capital to fuel your growth. This is known as equity fundraising,as opposed to non-dilutive financing like grants or loans.
Essential Fundraising Terms
Equity
L’equity This refers to the percentage of your company you give to investors. It’s the foundation of equity fundraising. In exchange, you receive funds to scale your business—but you also give up some control.
Captable (Capitalization Table)
The capitalidentity card. It outlines how equity is distributed among founders, employees, and investors. Every serious investor will scrutinize this document closely.
Roadshow
The roadshowis your pitch tour, the series of meetings with potential investors. It’s a high-stakes competition where clarity, persuasion, and stamina are key.
Love Money
This is your very first source of funding: friends and familywho invest out of trust and belief in you. It’s useful to get started without major dilution, but it comes with emotional expectations.
Pre-seed
The the earliest funding round, often before you’ve even built your MVP (Minimum Viable Product). It usually finances R&D, prototyping, and initial market validation.
BSPCE (Share Warrants for Startup Founders)
Les stock options used to incentivize your team. They allow employees to buy shares at a preferential rate in the future. Great for motivation and a positive signal to investors.
Deal flow
This is the pipeline of startups and investment opportunities that a VC or fund is actively reviewing.
Limited Partners (LP)
These are the investors behind the investors—family offices, institutions, or former entrepreneurs who put their money into venture capital funds.
General partners (GP)
They’re the fund managers. GPs are the individuals or firms who manage VC or private equity funds and make investment decisions.
Due diligence
This is the deep dive that happens before a deal closes. Everything is analyzed: finances, legal structure, technology, product, and team.
Closing
The deal is signed, the funds are transferred, and everyone breathes a little easier. It’s the official “go” for your funding round.
Exit
This is when investors (and sometimes founders) leave the company—through a sale, IPO, or merger. It’s the holy grail for most funds.
Mergers & Acquisitions (M&A)
This refers to companies either buying or being bought. It’s one of the most common exit strategies.
Not Sure You’ve Got It All Down?
- Equity fundraising
- Non-dilutive financing: Bpifrance, grants, loans, etc.
- Tax optimization (CIR, CII, JEI)
- CFO support (CFO-as-a-Service)
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