Startup Glossary: Letter "I"

An Ideal Customer Profile is a detailed description of the perfect customer type that gets the maximum value from a startup's product.

Incentive Stock Options (ISOs) are tax-advantaged stock options that can only be granted to US employees, qualifying for capital gains tax rates upon sale.

An Incubator is a collaborative program designed to help early-stage startup founders refine their ideas and build their MVP over an open-ended period.

Indemnification Provisions are contract clauses where one party agrees to compensate the other for losses, damages, or liabilities arising from breaches of representations.

Information Rights are contract clauses giving venture investors regular access to a startup's financial statements, budgets, and operational performance reports.

Internal Rate of Return (IRR) is the annualized rate of return earned on investments, factoring in the specific timing of all cash flows (drawdowns and distributions).

An Investment Pipeline is the structured funnel tracking startups as they move through different stages of a venture capitalist's evaluation process, from initial contact to close.

An Investor Rights Agreement (IRA) is a contract granting investors information rights, pro-rata rights, registration rights, and preemptive rights.

An IPO (Initial Public Offering) is the process by which a privately held startup lists its shares on a public stock exchange for sale to the public.

Incentive Stock Options (ISOs) and Non-Qualified Stock Options (NSOs) are two types of employee equity options that differ in tax treatment, eligibility, and Alternative Minimum Tax (AMT) triggers.