Startup Glossary: Letter "D"

Daily Active Users (DAU) is a product engagement metric measuring the number of unique users who log in and interact with a product on a daily basis.

The DAU to MAU Ratio is a metric that measures customer engagement and retention by showing the percentage of monthly active users who interact with the product daily.

Deal Flow is the rate at which venture capital firms and angel investors receive investment proposals and pitch decks from startups.

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

Deferred Revenue is cash collected from customers in advance of delivering service, recorded as a liability on the balance sheet until earned.

A Delaware C-Corporation is the standard legal corporate entity structure preferred by venture capital funds and institutional investors due to Delaware's established Chancery Court legal precedents and favorable corporate laws.

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

A Direct Listing is a public market exit where a private company lists its existing shares directly on an exchange without underwriting new shares or raising capital.

Disclosure Schedules are documents attached to the Stock Purchase Agreement listing exceptions to the company's representations and warranties.

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.

Dogfooding is the practice of a startup using its own product internally to identify bugs, test usability, and demonstrate confidence in the technology.

Double-Trigger Acceleration is an equity clause that accelerates vesting only if two distinct conditions are met: a change of control (acquisition) and termination without cause.

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.

The DPI Ratio is a venture performance metric measuring the actual cash returns distributed to a fund's investors relative to the total capital they paid in.

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.

A Due Diligence Checklist is a detailed document outlining the audits, records, and references required from a startup before an investment is finalized.

The Dunning Process is the automated system used by subscription startups to recover failed recurring credit card payments through emails and retry schedules.