GLOSSARY

A working glossary for founders, operators, and finance leads.

Plain-English definitions of accounting, tax, and financing terms — written so you can use them in a board meeting without an intermediate translation step.

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Accrual accounting

Recognizing revenue and expense when earned or incurred, not when cash moves.

Deferred revenue

Cash you have collected but have not yet earned. A liability, not income.

Burn rate

Net cash you are losing each month. Gross burn, net burn, and runway are all different.

Runway

How many months of cash you have left at the current burn rate.

QSBS

Qualified Small Business Stock — a tax exclusion for early-stage equity gains.

ASC 606

The US GAAP standard for revenue recognition. Five-step model.

ASC 718

The US GAAP standard for stock-based compensation expense.

Cap table

The capitalization table — who owns what, on what terms, with what dilution.

SAFE

Simple Agreement for Future Equity. A pre-priced-round investment instrument.

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