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LogoAI Finance Tools

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Glossary

AI Finance Glossary

Plain-English definitions of AI, accounting, and SaaS-finance terms.

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AllAccounting & BookkeepingAccounting Practice SoftwareAP AutomationAudit & ComplianceBusiness BankingCap Table & EquityCFO PlatformContract ManagementExpense ManagementFinancial Data & APIFinancial ReportingFP&A & ForecastingGlobal PayrollInsurance & RiskInvestment ManagementInvoicing & ARLending & CreditPayments InfrastructurePayrollPersonal BudgetingProcurementRevenue FinancingRevenue RecognitionSaaS BillingSales Tax & ComplianceTax FilingTax Filing PersonalTreasury Management

C

Convertible Note

A short-term debt instrument that converts to equity at a future funding round, typically with an interest rate, maturity date, discount, and valuation cap.

Cap Table & EquityRevenue Financing

F

Factoring

Selling accounts receivable to a third party at a discount in exchange for immediate cash.

Lending & CreditRevenue Financing

Full Ratchet

Anti-dilution protection resetting preferred stock conversion price to the lowest price of any subsequent share issuance.

Cap Table & EquityRevenue Financing

I

Invoice Factoring

A financing arrangement in which a business sells its outstanding invoices to a third party at a discount in exchange for immediate cash.

Invoicing & ARRevenue Financing

L

Liquidation Preference

A provision giving preferred stockholders the right to receive their investment back before common shareholders in a company sale or liquidation.

Cap Table & EquityRevenue Financing

M

Monthly Recurring Revenue

The normalized monthly value of all active recurring subscriptions, the operational pulse metric for SaaS businesses.

SaaS BillingRevenue Financing

N

Non-Participating Preferred

Preferred stock that receives its liquidation preference OR converts to common stock, but not both.

Cap Table & EquityRevenue Financing

P

Participating Preferred

Preferred stock that receives its liquidation preference and also participates in remaining proceeds alongside common stockholders.

Cap Table & EquityRevenue Financing

Priced Round

A funding round in which the company's value is formally determined and investors receive shares at a specific price, establishing a definitive valuation.

Cap Table & EquityRevenue Financing

Pro-Rata Rights

The right of existing investors to participate in future funding rounds proportionally to maintain their current ownership percentage.

Cap Table & EquityRevenue Financing

R

Ratchet

Mechanism adjusting investor ownership percentage upward if performance targets are missed post-investment.

Cap Table & EquityRevenue Financing

Redemption Rights

Preferred stockholder right to require the company to repurchase shares after a specified period.

Cap Table & EquityRevenue Financing

S

SAFE Note

A Simple Agreement for Future Equity — a startup financing instrument that converts to equity at a future priced round, without accruing interest or setting a maturity date.

Cap Table & EquityRevenue Financing

T

Term Sheet

Non-binding document outlining the key terms of a proposed investment or acquisition deal.

Cap Table & EquityRevenue Financing

W

Weighted Average Anti-Dilution

Anti-dilution adjustment formula balancing down-round share price with the volume of new shares issued.

Cap Table & EquityRevenue Financing