BUSINESS TERMS AND ACRONYMS

Short for Capitalization Table. Usually, a spreadsheet that shows ownership of a company. This is used and updated throughout the life of a company and shows common shares, preferred shares, convertible equity and warrants. This table helps private companies calculate their market value and make other financial decisions.

Enterprise Value. Enterprise Value (EV) is a financial metric that represents the total value of a company. It is used to assess the company's overall value, taking into account both its equity and debt. In other words, enterprise value is the market value of a company's total capitalization. The formula for calculating Enterprise Value is: EV=MarketCapitalization+TotalDebt−CashandCashEquivalents

Financial Planning & Analysis - Financial planning and analysis (FP&A) is a set of planning, forecasting, budgeting, and analytical activities that support a company's major business decisions and overall financial health.

Full Time Equivalent. FTE is a unit of measure based on the number of hours required to be a full- time employee in a particular business. If full-time is considered 40 hours per week each person that works 40 hours is considered a 1 FTE. If two employees each work 20 hours per week that equates to 1 FTE. FTE is used for budgeting and hiring practices and for calculating ROI for improvements in the organization or processes.

A type of AI that generates text, code, images, videos, and other media often in response to prompts from humans. ChatGPT is an example of Generative AI.

Objectives & Key Results. OKR is a goal setting methodology that can help teams set measurable goals and track the results.

Capital stock having priority over a corporation's common stock in the distribution of dividends and often of assets.

Return on Investment. Return on investment is a performance measure used to evaluate the efficiency or profitability of an investment or compare the efficiency of a number of different investments. ROI tries to directly measure the amount of return on a particular investment, relative to the investment’s cost. To calculate ROI, the benefit (or return) of an investment is divided by the cost of the investment. The result is expressed as a percentage or a ratio.

Sales Qualified Leads. When leads are turned over from the marketing department to the sales department they typically go through a process where a salesperson contacts the leads and determines

if it is a true lead or not. For project-based companies this may require the lead to have a need, timeline and budget.

A warrant entitles the holder to purchase the issuer’s stock for a predetermined price within a certain period. Warrant contracts are often longer than stock options and can last up to 15 years.

A 409A valuation is an independent appraisal of the fair market value of a private company’s common stock. This valuation is based on guidance and standards established in section 409A of the Internal Revenue Code of the IRS.