Category
In the UK, seven duties are set out in statute — the Companies Act 2006 — and they apply to every director of every company, including a sole director of a small one who may never have read them. The
Less than most people assume. A limited company is a separate legal person, so its debts are its own — but there are substantial and routine exceptions, and the ones that matter most are usually
A business model describes how the whole business creates and captures value; a revenue model is the narrower question of how you charge. The second is part of the first, and treating them as the
A structured change of direction that keeps what you have learned while changing a fundamental assumption. Eric Ries's definition is useful precisely because it excludes the two things people mistake
The match between the founders and the particular problem they have chosen — and investors weigh it heavily because at the earliest stage, when there is little product and no traction, it is close to
Because almost all of it comes from companies that succeeded, and the failures that did exactly the same things are not available to be interviewed. The classic illustration. During the Second World
Three progressively narrower measures of market size — total addressable, serviceable addressable, and serviceable obtainable market — used mainly in investor presentations and frequently misused
Setting a price based on what the outcome is worth to the customer, rather than on what it costs you to produce or what competitors charge. It is widely recommended, rarely implemented, and it
A structural advantage that makes a business hard to compete with over time — not because it is currently better, but because competing would be difficult even for someone with money and talent. Why
Churn is the rate at which customers leave. Cohort analysis groups customers by when they joined and tracks each group separately — which is the only way to see whether churn is actually improving.
The smallest thing you can build that tests your riskiest assumption — which is not the same as a cheap, cut-down version of your product, and the confusion between those two causes most MVP
The point at which a product satisfies a real, strongly felt need in a market large enough to build a business on — and the honest answer to how you know is that it is unmistakable when you have it
Fewer and less glamorous than the coverage suggests. The overwhelming majority of successful exits are trade sales, and several perfectly good outcomes are not exits at all. Trade sale (acquisition).
Whose money they invest, at what stage, and what they need from the outcome — and that last point determines how they will behave toward your company. Angel investor. An individual investing their
The right of certain shareholders — almost always investors — to be paid first when a company is sold or wound up, before ordinary shareholders receive anything. It is frequently the single most
The verification process between agreeing terms and money arriving — where an investor checks that what they were told is true, and where deals most often slow down or collapse. Why it exists. A term
Far less than the valuation, and far more than founders expect. A term sheet is mostly non-binding, but it sets the terms everything else follows from, and the economic and control clauses matter
Pre-money is what the company is agreed to be worth before the investment; post-money is pre-money plus the money invested. The difference determines what percentage the investor gets, and confusing
Ways of raising money without agreeing a valuation now — the investment converts into shares at a later priced round, on terms set in advance. The problem they solve. Valuing a very early company is
Vesting means equity is earned over time rather than owned outright from day one. A cliff is an initial period during which nothing vests at all. The standard arrangement. Four-year vesting with a
A capitalisation table records who owns what proportion of a company — every shareholder, every class of share, every option and everything that could become a share. What it contains: Every
Your percentage of a company falling because new shares were issued — not because anyone took shares from you. Understanding that distinction is the whole subject. How it happens. A company issues
The revenue and costs attributable to a single unit — one customer, one order, one subscription — stripped of everything else. The question they answer is simple and brutal: does one of these make
Burn rate is how fast a business consumes cash; runway is how long it can continue before running out. Together they are the most important numbers in any business that is not yet profitable. Gross