Glossary

CAC a.k.a. Customer Acquisition Cost

CAC, or the "customer acquisition cost", stands for the total cost in sales and marketing needed to earn a new customer over time.

Cap Table

A cap table, or "capitalisation table", is a spreadsheet or table for a start-up company that details who owns what shares or other equity interest in the business.

Capital Gains Tax a.k.a. CGT

Capital Gains Tax is a tax on the profit when you sell (or 'dispose of') something (an 'asset') that's increased in value.

Casting Vote

A casting vote to break a tied voting situation. For example, if there is deadlock within the Board of Directors.

CFEA a.k.a. Convertible Future Earnings Agreements

An investment instrument introduced by Horizon VC in 2021. Founders should be aware that, unlike SAFE, ASA, Convertible Loan Notes for example, the CFEA includes explicit Founder liability - even if the startup is liquidated, the founder owes the debt (and interest).

CGT a.k.a. Capital Gains Tax

Capital Gains Tax is a tax on the profit when you sell (or 'dispose of') something (an 'asset') that's increased in value.

Chairman

A chairman is a person who's in charge of a meeting, body, committee, etc. For example, their will usually be a chairperson on a company's Board of Directors.

CIC a.k.a. Community Interest Company

A CIC, or "community interest company", is a limited liability company designed to use its profits and resources for the public good. As a non-charitable social enterprise, a CIC exists to serve the community.

Cliff Reverse Vesting

In start-ups, cliff reverse vesting is often a one-year timeframe when an employee must continue to be employed before receiving any equity under a share option agreement. See also: Vesting

CLN a.k.a. Convertible Loan Note

A CLN, or convertible loan note, is a short-term debt that can convert into equity at an agreed-upon future date. These are rarely used by angel investors in the UK, as they are not compatible with SEIS / EIS.

Community Interest Company a.k.a. CIC

A CIC, or "community interest company", is a limited liability company designed to use its profits and resources for the public good. As a non-charitable social enterprise, a CIC exists to serve the community.

Companies House

Companies House maintains and stores the official register of all UK corporate entities, including limited companies and limited liability partnerships. As a Government body, it can dissolve and incorporate companies.

Conflict of interest

A set of circumstances that creates a risk that an individual's ability to apply judgement or act in one role is, or could be, impaired or influenced by a secondary interest.

Consideration

A legal concept referring to the requirement for reciprocity of commitment between parties to ensure an agreement is legally binding.

Convertible Future Earnings Agreements a.k.a. CFEA

An investment instrument introduced by Horizon VC in 2021. Founders should be aware that, unlike SAFE, ASA, Convertible Loan Notes for example, the CFEA includes explicit Founder liability - even if the startup is liquidated, the founder owes the debt (and interest).

Convertible Loan Note a.k.a. CLN

A CLN, or convertible loan note, is a short-term debt that can convert into equity at an agreed-upon future date. These are rarely used by angel investors in the UK, as they are not compatible with SEIS / EIS.

Counterpart

A legal concept referring to a document with two or more parties that is signed separately by the parties, rather than everyone signing the same piece of paper.

Covenant

A covenant is usually a formal, legally binding agreement between two or more people.

Crowdfunding

Crowdfunding is raising money from many people, usually via the internet.

Customer Acquisition Cost a.k.a. CAC

CAC, or the "customer acquisition cost", stands for the total cost in sales and marketing needed to earn a new customer over time.