Startup Glossary: Letter "D"

A Decacorn is a privately held startup company valued at $10 billion or more, representing the top tier of scale milestones.

Dilution occurs when a startup issues new shares to investors or employees, reducing the ownership percentage of existing shareholders.

A Discount Rate is a clause in a SAFE or convertible note that gives the early investor a percentage discount on the share price of the next priced equity round.

Distributed to Paid-In Capital (DPI) measures the actual cash returns distributed to a fund's investors (LPs) relative to the total capital they have paid into the fund.

A Down Round occurs when a startup raises a new round of funding at a pre-money valuation that is lower than the post-money valuation of its previous round.

Drag-Along Rights are legal provisions in a shareholder agreement that allow a majority of shareholders to force the remaining minority shareholders to participate in the sale of the company.

A Drawdown is the actual transfer of committed capital from a fund's investors (LPs) to the fund managers (GPs) following a capital call.

Dry Powder refers to the cash reserves committed by Limited Partners to a venture capital firm that have not yet been deployed or invested in startups.

Due Diligence is the comprehensive investigation and audit of a startup conducted by investors before finalizing an investment.