Stepping into the world of startups/VC/fundraising… and feel like you’ve landed on a foreign planet where everyone around you speaks a strange language? We got you! We’ve selected and explained 50+ terms used in the Polish startup and VC ecosystem that you absolutely need to know and understand – and from experience, we know it’s not obvious at all.
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A/B test – an experiment comparing two variants of a product or message to see which performs better.
Accelerator – a program or organization supporting startups at the earliest stage of development, offering mentoring and sometimes very early financing – often in exchange for equity.
ARR (Annual Recurring Revenue) – normalized annual value of recurring revenues in a subscription model.
B2B (Business-to-Business) – a business model where a company sells products or services to other companies, not individual consumers.
B2C (Business-to-Consumer) – a business model where a company sells products or services directly to individual customers (consumers).
Burn rate – monthly net cash outflow, which determines the length of runway.
CAC (Customer Acquisition Cost) – the average cost of acquiring one paying customer.
Cap table – a table showing the number of shares and ownership percentages of each shareholder.
Cash flow – money inflows and outflows (operating, investing, financing) that determine liquidity.
Churn – the percentage of lost customers or revenue in a given period.
COGS (Cost of Goods Sold) – direct costs of producing a product or delivering a service, e.g. materials, production, logistics, server costs in SaaS.
Cohort – a group of users, clients, or data separated by a common trait (e.g. signup month, acquisition source, subscription type), analyzed over time to understand retention and value.
Convertible (convertible loan) – a loan that converts into equity in a future round, usually at a lower valuation than that round.
Data room – an organized set of documents shared with investors during due diligence.
Debt financing – raising capital in the form of debt (loan/note) without giving up equity.
Dilution – the decrease of existing shareholders’ percentage ownership as a result of issuing new shares.
Due diligence – formal legal, tax, financial, and technical review of a company before an investment.
Equity – the ownership value of a company held by shareholders, represented by shares and equal to assets minus liabilities.
ESOP (Employee Stock Option Plan) – an employee share option program, usually with vesting.
Exit – investors’/founders’ exit by selling shares or through IPO.
Fundraising – the process of raising capital from angels, VCs, or other sources.
GMV (Gross Merchandise Value) – total transaction value on a platform/marketplace in a given period.
GTM (Go-to-market) – market entry plan: ICP, customer acquisition channels, pricing, pipeline, sales funnel.
ICP (Ideal Customer Profile) – the profile of your ideal customer, used to optimize product and sales.
Lead investor – when multiple investors join a round, the lead investor coordinates the process and other investors.
IPO (Initial Public Offering) – taking a company public on a stock exchange.
ISHA (Investment and Shareholders Agreement) – an agreement between founders and investors regulating cooperation, responsibilities, rights, and obligations.
KPI (Key Performance Indicators) – core success metrics (e.g. MRR, churn, CAC), monitored regularly.
LTV (Lifetime Value) – the total gross margin generated by a customer throughout the entire relationship; for profitability, LTV should exceed CAC.
Marketplace – an online platform facilitating transactions between sellers and buyers; unlike e-commerce, it doesn’t sell products itself, but connects both sides.
Gross margin – revenue minus COGS, showing how much remains to cover operating expenses (OPEX) and profit.
MRR (Monthly Recurring Revenue) – monthly recurring revenue in a subscription model.
MVP (Minimum Viable Product) – the minimal version of a product to quickly test market hypotheses.
P&L (Profit and Loss Statement) – a report of revenues, expenses, and profit for a given period.
Sales pipeline – an organized list of all sales opportunities (potential clients, leads) with their status in the sales process.
Pre-money / Post-money valuation – company value before vs. after investment.
Pre-seed – the earliest fundraising stage, usually before having a finished product or stable business model. Used for concept development, early market research, MVP, and building the first team.
Product-market fit – when a product successfully solves a real problem/need for a target customer group.
R&D (Research and Development, Polish: B+R) – work leading to new or improved products/technologies.
Runway – number of months until the company runs out of cash at the current burn rate.
SaaS (Software as a Service) – a subscription-based software sales model with MRR/ARR metrics and low deployment costs.
Sales funnel – model showing the sales process as stages a potential client goes through (from first contact, through qualification, to closing the deal).
Seed – investment round used for product development and early commercialization.
Series A – investment round for scaling sales and operations after proving product-market fit.
TAM/SAM/SOM – market size estimates: total, addressable, and obtainable segments.
Term sheet – non-binding document with key investment terms before final agreements.
Traction – measurable proof of demand and growth (revenue, users, pipeline, retention).
Unit economics – profitability at the unit level (e.g. per customer/order) and its dynamics.
Venture builder – an entity creating startups from scratch with teams, often providing pre-seed funding and processes.
Venture capital – high-risk capital invested in startups and young companies with strong growth potential, in exchange for equity.
Vesting – the gradual process of earning rights to shares, stock options, or other benefits in a company
PS. Interested? Have questions? Write to us at contact@thcpathfinder.com or sylwia.duszynska@thcpathfinder.com.