Glossary

Down Round & Flat Round

A “down round” is an investment round in which a company raises capital at a lower valuation than in its previous round. When a company raises capital at the same valuation as in its previous round, it is called a “flat round.”

Feb 8, 2025alejandro-gonzalezredwood-ventures

What is a Down Round & Flat Round?

A “down round” is an investment round in which a company raises capital at a valuation lower than in its previous round. On the other hand, when a company raises capital at the same valuation as in its previous round, it is called a “flat round.”

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Startup

A startup is an innovative company designed to grow exponentially and scale across multiple markets. In its early stages, it will face considerable uncertainty about the ideal product and business model to support that growth and scalability.

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Accelerator and incubator

A business accelerator helps other companies grow in their early stages. An incubator, on the other hand, supports projects at the idea stage and helps them turn that idea into a product.

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Annual Recurring Revenue

Annual Recurring Revenue, or ARR, means annual recurring revenue. It is the total amount of predictable, recurring revenue a startup generates from its customers each year.