Angel Investor

The investor who takes the primary role in a financing round, typically investing the largest amount, setting the terms, negotiating the term sheet, and conducting due diligence. The lead investor often takes a board seat and serves as the main point of contact for the company.

A form of private equity financing provided to early-stage, high-growth potential companies in exchange for equity. VC firms typically invest across multiple rounds (seed through Series C+), provide strategic guidance, and target returns through exits within 5-10 years.

Uncommitted or undeployed capital that a fund or investor has available to invest. High levels of dry powder in the market can increase competition for deals and drive up valuations, while individual fund dry powder indicates remaining investment capacity.

The total amount of money that limited partners have pledged to invest in a fund over its lifetime. Not all committed capital is drawn down immediately; general partners issue capital calls as investment opportunities arise.

An investor in a private equity or venture capital fund who contributes capital but does not participate in day-to-day investment management. LPs include pension funds, endowments, family offices, sovereign wealth funds, and high-net-worth individuals.

Short-term funding used to bridge the gap between two financing rounds or before an anticipated liquidity event. Bridge loans or convertible notes are common structures, often provided by existing investors to sustain operations until the next milestone.

A short-term debt instrument that converts into equity at a future financing round, typically at a discount to the next round's valuation. Convertible notes are commonly used in seed-stage financing because they defer the need to establish a valuation.

The ownership stake held by a company's founders, typically established at incorporation and subject to dilution through subsequent funding rounds. Founders' equity is usually subject to vesting schedules and may carry different rights from investor shares, reflecting the intangible contribution of the founding team's vision and early-stage effort.

What is the Berkus Method for startup valuation?

The Berkus Method values pre-revenue startups by assigning values (typically up to £500K each) to five key milestones: sound idea, prototype, quality team, strategic relationships, and product rollout.

How do you value a startup with no revenue?

Pre-revenue startups are valued using the Scorecard Method, Berkus Method, or Comparable Transaction approach — all of which focus on the team, technology, market opportunity, and intangible asset quality rather than financial metrics.

What is a venture capital fund?

A venture capital fund pools money from limited partners (LPs) to invest in early-stage, high-growth companies in exchange for equity, typically targeting 3-5x returns over a 7-10 year fund life.