Co-founder and startup glossary
By the EasyCofounder team ·
In short
The EasyCofounder glossary defines 126 terms used when starting a company with co-founders, from “co-founder” and “shareholders’ agreement” to “vesting”, “cliff” and “cap table”. Each definition is one or two sentences long and links to the guide that explains the term in detail.
Terms starting with A
Acceleration
Early vesting of unvested shares triggered by an event, usually the sale of the company (single or double trigger).
Explained in Co-founder vesting
Accelerator
An intensive, selective programme that helps an already launched startup grow fast, often in exchange for equity.
Explained in Incubator or accelerator
Advisor
Outside adviser who helps the founders on a specific topic, without being an employee or a founding shareholder.
Explained in Startup advisors
Advisor agreement
Contract setting out an advisor’s scope, term, confidentiality and compensation.
Explained in Startup advisors
Advisory board
Consultative group of several advisors, with no decision-making power in the company.
Explained in Startup advisors
Approval clause
A clause that makes the entry of a new shareholder subject to the prior consent of the existing shareholders.
Explained in French SAS with co-founders
Articles of association
The company’s constitutional document, which sets out its operating rules (called bylaws or a certificate of incorporation in some countries).
Explained in Shareholders’ agreement
Assignment of rights
A contract by which the author of a creation, such as code or a logo, transfers their rights to the company.
Explained in Preparing for due diligence, Protecting your idea
Assimilé salarié
The social security regime of a paid SAS president, close to that of employees but without unemployment insurance.
Explained in Choosing your legal structure
Asynchronous communication
Exchanges that do not require an immediate reply (messages, documents), suited to teams that do not work the same hours.
Explained in Remote co-founders
Terms starting with B
Bad leaver
A co-founder whose departure is considered wrongful or premature under the shareholders’ agreement, with less favourable buyback terms.
Explained in Co-founder conflict
Billing unit
What the price is calculated on: user, volume, transaction or flat fee.
Explained in Startup pricing
BSA
French share warrant giving the right to buy shares at a price set in advance.
Explained in Startup advisors
BSA AIR
A French share subscription warrant that lets someone invest in a startup while deferring the valuation to a later round.
Explained in Pre-seed funding, Understanding the BSA AIR
BSPCE
Bon de souscription de parts de créateur d’entreprise: in France, the right to buy shares at a price set in advance.
Explained in Understanding BSPCE, Hiring your first employees
Burn rate
The amount of money a company spends each month beyond its revenue.
Explained in Founder salary
Business angel
A private individual who invests their own money in a young company and supports it with their experience.
Explained in Finding angel investors
Business angel network
An association of private investors who review and fund projects together.
Explained in Finding angel investors
Buy-back clause
Clause setting the conditions under which a departing co-founder’s shares can be bought back.
Explained in Business with a friend
Terms starting with C
Cap table
A table listing a company’s shareholders and the rights giving access to its equity.
Explained in Building your cap table
Cash flow plan
A monthly table of cash coming in and going out, showing the money available.
Explained in Writing your business plan
CEO
Chief executive officer, responsible for strategy, fundraising and running the startup.
Explained in Dividing co-founder roles
Churn
The share of customers or revenue lost during a period.
Explained in Startup metrics
Cliff
Minimum period before which no shares subject to vesting are acquired.
Explained in Find a co-founder, Equity split, Co-founder vesting
Closing
The final completion of the round: signing the documents, paying the funds and issuing the shares.
Explained in Negotiating a term sheet
Co-founder
Someone who starts a company with others and commits to it for the long term, usually holding equity.
Explained in Find a co-founder
Code ownership
The company’s legal rights over the software built for it, to be secured in contracts with contractors.
Explained in Non-technical founder
Cohort
A group of users who joined during the same period, tracked over time.
Explained in Reaching product-market fit
Comparables
Valuations seen in rounds raised by similar companies, used as reference points.
Explained in Valuing your startup
Concierge MVP
A test in which the service is delivered manually to a few customers before anything is automated.
Explained in Build an MVP without coding
Concierge test
Delivering a service manually to a few customers to learn what they need before automating it.
Explained in Validate your startup idea
COO
Chief operating officer, responsible for day-to-day operations and processes.
Explained in Dividing co-founder roles
Copyright
A right that protects an original creation from the moment it is made, with no registration required.
Explained in Protecting your idea
CPO
Chief product officer, responsible for the product vision and development priorities.
Explained in Dividing co-founder roles
CTO
Chief technology officer, responsible for the technical product and the development team.
Explained in Dividing co-founder roles
Customer acquisition cost
The sales and marketing spend needed to win a new customer.
Explained in Building your go-to-market
Customer discovery
Structured interviews with potential customers to understand a problem before designing a solution.
Explained in Validate your startup idea
Terms starting with D
Data room
A secure sharing space in which the company makes its documents available to investors.
Explained in Preparing for due diligence
Decision log
A shared document in which the team records each important decision, its date and the reasons for it.
Explained in Remote co-founders
Demo day
An end-of-programme event at which startups present their project to investors.
Explained in Incubator or accelerator
Dilution
The drop in the percentage each partner holds when new shares are issued.
Explained in Equity split, Pre-seed funding, Understanding BSPCE
Discount
A reduction applied to the price of the next round to set the conversion price.
Explained in Understanding the BSA AIR
Dividend
A distribution of profits to shareholders, generally only possible when the company has distributable profits.
Explained in Founder salary
Down round
A round raised at a lower valuation than the previous one.
Explained in Valuing your startup
DPAE
Déclaration préalable à l’embauche: in France, the pre-hiring declaration filed with the Urssaf before an employee starts.
Explained in Hiring your first employees
Drag-along
A clause requiring minority shareholders to sell their shares if a majority accepts a purchase offer.
Explained in Negotiating a term sheet
Due diligence
The set of checks carried out by an investor before finalising an investment.
Explained in Preparing for due diligence
Terms starting with E
Employer cost
The gross salary plus employer social security contributions, which represents the real cost of an employee to the company.
Explained in Hiring your first employees
Exclusion clause
A clause in the articles that, in specific cases, can require a shareholder to sell their shares.
Explained in Co-founder conflict
Exclusivity clause
A clause that may prohibit an employee from carrying out any other professional activity during their contract.
Explained in Quitting your job to start up
Exercise
The moment the holder uses their warrants, paying the exercise price to become a shareholder.
Explained in Understanding BSPCE
Exercise price
The price at which the holder can buy the shares, set at the time of the grant.
Explained in Understanding BSPCE
EXIST
A German federal programme supporting start-ups that come out of universities and research institutions.
Explained in Student entrepreneur
Terms starting with F
Financial forecast
A company’s set of projected figures over several years, built from assumptions.
Explained in Writing your business plan
Freemium
A model offering a limited free version and paid advanced features.
Explained in Startup pricing
Full ratchet
An anti-dilution clause that brings the price the investor paid down to the price of a lower round.
Explained in Understanding dilution
Fully diluted
A view of the equity that assumes all warrants and convertible instruments are exercised or converted.
Explained in Building your cap table
Fully diluted basis
A calculation of the equity that assumes all warrants and convertible instruments are exercised or converted.
Explained in Understanding dilution
Funding plan
A table that sets the company’s needs against the resources planned to cover them.
Explained in Writing your business plan
Terms starting with G
Go-to-market
The set of choices that organise how a product is brought to market: target, message, price, channels and sales.
Explained in Building your go-to-market
Good leaver
A co-founder whose departure is considered legitimate under the shareholders’ agreement, with favourable buyback terms.
Explained in Co-founder conflict
Good leaver / bad leaver
The distinction between an “acceptable” and a “faulty” departure of a partner, with different consequences for their shares.
Explained in Shareholders’ agreement, Co-founder vesting
Terms starting with H
Honour loan
A personal loan granted to the founder by a support network, often interest-free and unsecured (prêt d’honneur in France).
Explained in Funding without dilution
Terms starting with I
Ideal customer profile
The type of customer who gets the most value from the product and buys most easily.
Explained in Building your go-to-market
Incubator
An organisation that supports the creation of a company, from the idea to the first customers.
Explained in Incubator or accelerator
Intellectual property
Rights over creations (code, brand, design) that must be clearly assigned to the future company.
Explained in Co-founder trial period
Terms starting with L
Landing page test
A single web page describing an offer, used to measure interest through sign-ups or requests.
Explained in Validate your startup idea
Leave to start a business
In France, a temporary suspension of the employment contract that allows an employee to create or take over a business, subject to conditions.
Explained in Quitting your job to start up
Letter of intent
A non-binding document summarising the main terms proposed by an investor.
Explained in Finding angel investors
Leverage
The ability of a first source of funding to make other funding easier to obtain.
Explained in Funding without dilution
Liquidation preference
The investor’s right to get their money back first in a sale or liquidation.
Explained in Negotiating a term sheet
Love money
The French term for money contributed by the founders’ friends and family when the project starts.
Explained in Pre-seed funding
Terms starting with M
Mediation
An amicable process in which a neutral third party helps the co-founders reach an agreement themselves.
Explained in Co-founder conflict, Business with a friend
Micro-entreprise
A simplified French regime for sole proprietorships, subject to revenue caps.
Explained in Choosing your legal structure
MRR
Monthly recurring revenue, the sum of active subscriptions expressed per month.
Explained in Startup metrics
MVP
Minimum viable product: the smallest experiment that shows whether customers get real value.
Explained in Validate your startup idea, Non-technical founder, Build an MVP without coding
Terms starting with N
NDA
A non-disclosure agreement committing a party not to disclose certain information it receives.
Explained in Protecting your idea
No-code
Tools that let you build websites, apps and automations through visual interfaces, without programming.
Explained in Non-technical founder, Build an MVP without coding
Non-compete clause
A contract clause that may, under certain conditions, restrict working for a competitor after you leave.
Explained in Quitting your job to start up
Non-dilutive funding
A resource that does not involve issuing new shares and preserves the founders’ stake.
Explained in Funding without dilution
Terms starting with P
Persevere
Keep the same strategy and improve execution rather than change the hypothesis.
Explained in Startup pivot
Pivot
A deliberate change of target customer, problem or offer based on what tests have revealed.
Explained in Validate your startup idea, Startup pivot
Post-money
The company’s value just after the round, equal to the pre-money plus the amount invested.
Explained in Valuing your startup
Pre-emption
The shareholders’ priority right to buy the shares another shareholder wishes to sell.
Explained in French SAS with co-founders
Pre-incorporation collaboration agreement
A document signed before the company is set up that lays down the rules for working together, confidentiality and ownership of the work produced.
Explained in Co-founder trial period
Pre-money
The company’s value agreed just before the new investors come in.
Explained in Valuing your startup
Pre-seed
A startup’s very first funding round, before seed, intended to validate the problem and build a first version.
Explained in Pre-seed funding
President
The mandatory executive of an SAS, who represents the company towards third parties.
Explained in French SAS with co-founders
Prêt d’honneur
In France, an interest-free, unsecured personal loan granted to a founder by a support network, often then put into the company.
Explained in Pre-seed funding
Product-market fit
The fit between a product and a market segment, reflected in lasting adoption.
Explained in Reaching product-market fit
Terms starting with R
Reclassification
A court decision that turns an independent contracting arrangement into an employment contract when a relationship of subordination is established.
Explained in Hiring your first employees
Registered office
The company’s official address, which has legal and tax consequences.
Explained in Remote co-founders
Repayable advance
Funding paid for an innovation programme, to be repaid on the agreed terms if it succeeds.
Explained in Funding without dilution
Retention
The share of users or customers who keep using the product after a given period.
Explained in Reaching product-market fit
Reverse vesting
Setup in which founders own their shares immediately but the unvested portion can be bought back if they leave.
Explained in Co-founder vesting
Runway
How long a person or company can keep going with the money available before running out.
Explained in Founder salary, Startup metrics, Startup pivot
Rupture conventionnelle
In France, a way of ending a permanent employment contract by mutual agreement between employer and employee, following a regulated procedure.
Explained in Quitting your job to start up
Terms starting with S
Salary
Regular payment for work done for the company, treated as an operating cost.
Explained in Founder salary
Sales cycle
The time between first contact with a prospect and signing.
Explained in Building your go-to-market
SAS
Société par actions simplifiée, a French company form whose organisation is largely set freely in its articles of association.
Explained in French SAS with co-founders, Choosing your legal structure
SASU
An SAS with a single shareholder, which becomes a standard SAS as soon as a second shareholder joins.
Explained in Choosing your legal structure
Secondary sale
The sale of existing shares by a shareholder, for example a founder selling a small portion during a funding round.
Explained in Founder salary
Segment
A group of customers who share a similar need, context and buying criteria.
Explained in Reaching product-market fit
SNEE
The French national student-entrepreneur status, which supports students working on a startup project.
Explained in Student entrepreneur
Startup studio
An organisation that creates startups in-house and recruits founders to run them.
Explained in Incubator or accelerator
Terms starting with T
Technical co-founder
A founding partner responsible for the product and technology, often with the title of CTO.
Explained in Non-technical founder
Technical debt
Shortcuts taken in the code to go faster, which make later changes slower or riskier until they are fixed.
Explained in Non-technical founder
Term sheet
A document summarising the main conditions proposed by an investor before the final documents are drafted.
Explained in Negotiating a term sheet
Trademark
A registered sign that distinguishes a company’s products or services.
Explained in Protecting your idea
Terms starting with U
University incubator
A support programme attached to a higher education institution and open to its students or alumni.
Explained in Student entrepreneur
Terms starting with V
Valuation
The value given to the company during a funding round, which determines the share of equity the investor receives.
Explained in Finding angel investors
Valuation cap
The maximum valuation used to calculate the conversion, in the investor’s favour.
Explained in Understanding the BSA AIR
Valuation floor
The minimum valuation used to calculate the conversion, in the founders’ favour.
Explained in Understanding the BSA AIR
Value-based pricing
Setting the price from the gain the customer gets rather than from your costs.
Explained in Startup pricing
Vanity metric
A flattering figure that does not support any useful decision.
Explained in Startup metrics
Vesting
Progressive acquisition of shares by a partner over the time they spend in the company.
Explained in Find a co-founder, Equity split, Co-founder vesting
Terms starting with W
Warranties
Commitments made by the company or the founders in the investment agreement about the accuracy of the information provided.
Explained in Preparing for due diligence
Weighted average
An anti-dilution clause that adjusts the investor’s price taking into account the size of the new issue.
Explained in Understanding dilution
Willingness to pay
The maximum price a customer will accept for a product, estimated through tests and real commitments.
Explained in Startup pricing
Wizard of Oz MVP
An MVP whose interface appears automated while requests are actually handled by hand behind the scenes.
Explained in Build an MVP without coding
Working capital requirement
Money tied up by the gap between payments received from customers and the expenses to be paid.
Explained in Writing your business plan
How is this glossary written?
Every definition in the glossary comes from an EasyCofounder guide, where the term is explained with its context, examples and, for legal or tax notions, the official sources consulted.
The definitions are general reference points written by the EasyCofounder team. They do not replace advice from a lawyer or an accountant on a specific situation.
The glossary is updated together with the guides: a term added or corrected in a guide is added or corrected on this page too.