Comprehensive definitions of 55+ venture studio, startup, and venture capital terms. Master the vocabulary of company building.
A venture studio is an organization that systematically creates and builds multiple startups from the ground up, providing ideas, initial funding, operational support, and founding teams.
An investment thesis is the strategic framework and set of beliefs that guide a venture studio's decisions about which types of companies to build, which markets to target, and what opportunities to pursue.
Validation is the process of testing assumptions and gathering evidence that a startup idea is worth pursuing, typically through customer interviews, prototypes, and market experiments.
Product-market fit (PMF) is the degree to which a product satisfies strong market demand, typically evidenced by rapid organic growth, high retention, and customers actively recommending the product.
A playbook is a documented collection of best practices, processes, frameworks, and templates that venture studios use to systematically build startups, codifying learnings from past successes and failures.
The studio model refers to the organizational structure, funding mechanism, and operational approach that defines how a venture studio creates companies, compensates team members, and generates returns.
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A startup advisor is an experienced professional who provides strategic guidance, expertise, and network connections to a startup, typically in exchange for a small equity stake (0.25-1%) or advisory fees.
Annual Recurring Revenue (ARR) is the yearly value of a company's recurring subscription revenue, calculated by annualizing monthly recurring revenue (MRR × 12).
A startup accelerator is a fixed-term (typically 3-6 month) program that provides early-stage startups with mentorship, education, resources, and often seed funding in exchange for equity.
An angel investor is a high-net-worth individual who provides capital to early-stage startups in exchange for equity, often investing before institutional venture capital.
The Board of Directors is a group of individuals elected to represent shareholders and oversee major company decisions, including hiring/firing the CEO, approving funding rounds, and guiding company strategy.
Burn rate is the rate at which a startup spends cash, typically measured monthly. Gross burn is total spending; net burn is spending minus revenue.
Bootstrapping is the practice of building and growing a startup without external investment, relying instead on personal savings, revenue from customers, or minimal outside capital.
Carried interest (or "carry") is the share of investment profits—typically 20%—that General Partners receive as compensation after returning invested capital to Limited Partners.
A cap table (capitalization table) is a detailed spreadsheet or ledger that lists all shareholders in a company, the types of equity they hold, their ownership percentages, and how ownership changes over time.
A co-founder is one of two or more individuals who jointly establish a company, sharing responsibility for its creation, early development, and typically its equity ownership.
The Chief Executive Officer (CEO) is the highest-ranking executive in a company, responsible for overall strategy, operations, culture, and serving as the primary representative to investors, board members, and external stakeholders.
The Chief Technology Officer (CTO) is responsible for a company's technical strategy and product development, leading engineering teams and making key technology decisions.
Churn rate is the percentage of customers or revenue lost over a given period, typically measured monthly or annually. Lower churn indicates better customer retention.
Customer Acquisition Cost (CAC) is the total cost of acquiring a new customer, including marketing, sales, and related expenses, divided by the number of new customers acquired.
A corporate venture studio is a venture studio operated by or in partnership with a large corporation, building startups that often align with the corporation's strategic interests or leverage its assets.
A convertible note is a form of short-term debt that converts into equity (usually preferred stock) at a future financing round, typically at a discounted price relative to new investors.
Dilution occurs when a company issues new shares, reducing the ownership percentage of existing shareholders even though their number of shares remains the same.
Due diligence is the comprehensive investigation and analysis process conducted before making an investment or acquisition, examining business, financial, legal, and technical aspects of the target company.
Equity represents ownership interest in a company, typically expressed as shares of stock. In startups, equity is distributed among founders, investors, and employees as compensation and investment.
An Entrepreneur in Residence (EIR) is an experienced professional, often a former founder, who joins a venture studio or VC firm to evaluate opportunities, develop ideas, and potentially lead a new portfolio company as CEO.
An exit is a liquidity event where startup founders and investors sell their equity ownership, typically through acquisition by another company (M&A) or an initial public offering (IPO).
A go-to-market (GTM) strategy is the comprehensive plan for launching a product into a market, including target customers, value proposition, pricing, distribution channels, and customer acquisition tactics.
A General Partner (GP) is the managing partner of a venture fund who makes investment decisions, manages portfolio companies, and has unlimited liability for the fund's obligations.
Ideation is the systematic process of generating, developing, and refining new business ideas within a venture studio, typically guided by the studio's thesis and market research.
A startup incubator is a program that supports early-stage companies by providing workspace, mentorship, and resources over an extended period, typically without taking equity or with minimal equity.
A portfolio company is a startup that has been created by, incubated within, or invested in by a venture studio, becoming part of the studio's collection of companies.
Product-market fit (PMF) is the degree to which a product satisfies strong market demand, typically evidenced by rapid organic growth, high retention, and customers actively recommending the product.
A pivot is a structured course correction in which a startup changes one or more fundamental elements of its business—such as target customer, problem, solution, or business model—while retaining learned insights.
A playbook is a documented collection of best practices, processes, frameworks, and templates that venture studios use to systematically build startups, codifying learnings from past successes and failures.
Pre-seed funding is the earliest stage of external startup financing, typically used to validate an idea, build an initial prototype, or support founders before product-market fit.
A startup studio is synonymous with venture studio—an organization that builds multiple startups internally by providing resources, teams, and capital from idea to launch.
A spin-out occurs when a venture studio formally launches a new company as an independent entity, typically after the concept has been validated and a founding team is in place.
Shared services are operational support functions—such as finance, legal, HR, marketing, and engineering—that a venture studio provides centrally to multiple portfolio companies, reducing costs and accelerating growth.
The studio model refers to the organizational structure, funding mechanism, and operational approach that defines how a venture studio creates companies, compensates team members, and generates returns.
Seed funding is the first significant round of venture capital financing, typically raised after initial product validation to hire a team, develop the product, and achieve early growth milestones.
Series A funding is typically the first major venture capital round after seed, raised when a startup has proven its business model and is ready to scale operations, team, and customer acquisition.
A studio partner is a senior member of a venture studio who plays a key role in ideation, company building, founder recruitment, investment decisions, and portfolio company support.
A SAFE (Simple Agreement for Future Equity) is an investment instrument created by Y Combinator that gives investors the right to receive equity at a future financing event, without being debt.
Skin in the game refers to having personal risk, investment, or stake in an outcome, ensuring that decision-makers are aligned with the success or failure of the venture.
Sweat equity is company ownership earned through labor and effort rather than cash investment, typically granted to founders, early employees, or advisors who contribute work in exchange for equity.
An investment thesis is the strategic framework and set of beliefs that guide a venture studio's decisions about which types of companies to build, which markets to target, and what opportunities to pursue.
A technical co-founder is a company founder who takes primary responsibility for the technical aspects of the business, including product development, engineering leadership, and technology strategy.
A term sheet is a non-binding document that outlines the key terms and conditions of a proposed investment, serving as the basis for negotiation before formal legal agreements are drafted.
A venture studio is an organization that systematically creates and builds multiple startups from the ground up, providing ideas, initial funding, operational support, and founding teams.
A venture builder is an organization that creates and develops startups internally, providing hands-on operational support, resources, and capital throughout the company-building process.
Validation is the process of testing assumptions and gathering evidence that a startup idea is worth pursuing, typically through customer interviews, prototypes, and market experiments.
Vesting is the process by which equity ownership is earned over time, protecting companies from early departures and ensuring that founders and employees remain committed to long-term success.
A venture partner is a part-time or consulting partner at a venture firm or studio who contributes deal flow, domain expertise, and portfolio support without being a full-time member of the team.
Venture Capital (VC) is a form of private equity financing where investors provide capital to high-growth potential startups in exchange for equity ownership, typically expecting returns through eventual IPO or acquisition.
Valuation is the estimated worth of a company at a given point in time. Pre-money valuation is the company's value before new investment; post-money is the value after including the new investment.
