Startup Glossary: Letter "E"

Early Exercise is a feature allowing option holders to purchase unvested stock options immediately, converting them to common stock subject to company vesting buyback rules.

An Earnout Provision is a contractual structure in acquisitions where a portion of the purchase price is paid out in the future, conditional on the startup meeting post-sale performance milestones.

EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) is a financial metric used to evaluate a company's operational profitability.

An Economic Moat is a startup's distinct, long-term competitive advantage that protects its market share and profit margins from competitors.

An Elevator Pitch is a concise, compelling verbal summary of a startup's value proposition, target market, and traction, deliverable in 30 to 60 seconds.

Equity Crowdfunding is the online offering of private company securities to a large group of retail and accredited investors in exchange for capital.

An Equity Grant is the formal allocation of stock options, RSUs, or restricted stock to an employee, advisor, or founder by the company's Board of Directors.

An Escrow Account is a third-party account where a portion of acquisition proceeds is held to cover potential post-closing indemnification claims.

An Employee Stock Ownership Plan (ESOP) is a corporate structure that allows employees to acquire ownership interest in the company through stock options.

An Executive Summary is a one-page document summarizing a startup's business model, technology, market opportunity, and financial targets.

An Exit is the liquidity event through which founders and investors liquidate their ownership stakes in a startup to realize returns.

Expansion ARR is the additional Annual Recurring Revenue generated from existing customers through up-selling, cross-selling, or usage expansions.

Expansion Revenue is the additional revenue generated from existing customers through up-selling, cross-selling, or usage-based pricing.