Glossary Term Financial Docs: 13 terms

An Approval Policy (Attestant Rules) in a startup refers to the internal framework that governs how decisions, financial transactions, contracts, and other critical actions are authorized. This policy ensures accountability, transparency, and adherence to regulatory or corporate governance requirements. Key…

Auditor Contact Details refer to the essential information regarding the accounting or auditing firm responsible for reviewing a startup’s financial records. Auditors play a key role in ensuring compliance, financial accuracy, and transparency, which is crucial for investors, regulators, and…

A Balance Sheet is a financial statement that provides a snapshot of a startup’s financial position at a given point in time. It shows what the company owns (assets), owes (liabilities), and the remaining value for owners (equity). Key Components…

A Cash Flow Statement is a financial report that tracks how cash moves in and out of a startup over a specific period (monthly, quarterly, or annually). Unlike a Profit & Loss Statement, which includes non-cash expenses like depreciation, the…

Commercial Bank Details of a startup refer to the essential banking information required to manage business finances. These details are typically used for transactions, payments, funding transfers, and investor communications. Key Commercial Bank Details for a Startup: Why Bank Details…

Company ValuationCompany Valuation refers to the process of determining the financial worth of a startup, typically used for investment, acquisition, or strategic decision-making. This valuation is based on financial performance, market potential, assets, and various risk factors. Key Aspects of…

‘An Exit Plan’An Exit Plan'An Exit Plan for a startup refers to the strategy for how founders and investors will eventually leave or transition out of the business while maximizing value. This plan outlines the possible exit strategies, financial implications, and operational considerations involved in winding down or transferring ownership. Key Exit Strategies for a Startup: • Acquisition (Being Bought by Another Company)o A larger company purchases the startup, integrating its technology, team, or market presence.o Founders and investors profit from the sale, and employees may continue under new ownership. • Initial Public Offering (IPO - Going Public)o The startup issues shares in the... for a startup refers to the strategy for how founders and investors will eventually leave or transition out of the business while maximizing value. This plan outlines the possible exit strategies, financial implications, and operational…

A Financial ForecastA Financial ForecastA Financial Forecast for a startup is a forward-looking projection of its financial performance, typically over the next few months or years. It helps founders, investors, and stakeholders predict revenue, expenses, and profitability, guiding strategic decisions and funding efforts. Key Components of a Startup’s Financial Forecast • Revenue Forecasto Estimation of future sales based on market research, growth trends, and customer demand.o Includes different revenue streams if applicable (e.g., product sales, subscriptions, licensing). • Expense Forecasto Predicts costs for operations, payroll, rent, marketing, technology, and other business activities.o Includes both fixed costs (consistent expenses like salaries) and variable costs (changing... for a startup is a forward-looking projection of its financial performance, typically over the next few months or years. It helps founders, investors, and stakeholders predict revenue, expenses, and profitability, guiding strategic decisions and funding…

Funding StrategyFunding Strategy in a Startup refers to the structured approach for securing financial resources to support business growth, product development, and operational expenses. A well-defined funding strategyFunding Strategy in a Startup refers to the structured approach for securing financial resources to support business growth, product development, and operational expenses. A well-defined funding strategy ensures capital efficiency, investor attraction, financial sustainability, and long-term scalability. Key Funding Strategies for Startups • Bootstrapping (Self-Financing)o Funds the business using personal savings, revenue reinvestment, or founder contributions.o Provides full control without investor interference, but may limit growth speed. • Friends & Family Investmento Raises initial capital from close networks and personal connections.o Can be a low-interest or informal financing option, but requires clear agreements. • Angel Investors & Seed Fundingo Secures... ensures capital efficiency, investor attraction, financial sustainability, and long-term scalability. Key Funding…

A Guarantee CommitmentA Guarantee CommitmentA Guarantee Commitment in a startup refers to a formal pledge or obligation that ensures specific financial, operational, or contractual responsibilities are met. These commitments can come from founders, investors, or the company itself, depending on the context. Types of Guarantee Commitments in a Startup: • Founder or Investor Guaranteeso Personal Guarantee: Founders may personally guarantee loans or obligations if the startup lacks sufficient assets.o Investor Commitment: Investors may provide guarantees related to funding rounds or continued financial support. • Bank or Loan Guaranteeso When a startup takes out a loan, the bank might require a guarantee from the founders... in a startup refers to a formal pledge or obligation that ensures specific financial, operational, or contractual responsibilities are met. These commitments can come from founders, investors, or the company itself, depending on the context.…