Know the numbers.
Own the room.
An introduction to the founder's deal-room survival guide. No MBA required.
Recognize investor language. Translate it into plain English. Apply the numbers. Defend the answer—with evidence, not guesswork.
Four steps to investor fluency
- Recognize: When someone says a term, understand what it means.
- Translate: Explain it in one sentence without hiding behind jargon.
- Apply: Connect it to a business, financing plan, or transaction.
- Defend: Explain your assumptions, downside risks, and evidence.
Five terms you'll actually hear
Earnings before interest, taxes, depreciation, and amortization. It is a frequently used measure of earnings, but it does not equal cash flow.
The value attributed to a business's operating assets, conceptually distinct from the amount paid to equity holders.
Usually current assets less current liabilities. In M&A deals, it often has a narrower negotiated definition.
The layers of funding—such as secured debt, subordinated debt, preferred equity and common equity—and their economic priority.
A document laying out proposed deal terms. Many economic terms may be nonbinding, while clauses such as confidentiality or exclusivity can be binding.
One question. One confident answer.
Investor: “What's your EBITDA margin?”
Founder: “Our annual revenue was $2 million and EBITDA was $400,000, so EBITDA margin was 20%. Those are illustrative numbers here; in a real meeting I'd specify the reporting period and whether the EBITDA figure has been adjusted.”
Now the important nuance: EBITDA doesn't account for changes in working capital or capital expenditures. It cannot tell the complete story of cash available to service debt.
Your first practice prompt
Say your answer out loud: “If you raise $500,000 at a $2 million pre-money valuation, what's the post-money valuation?”
Answer: $2.5 million post-money. The new investor would own 20% immediately afterward, assuming a simple priced round with no other changes to capitalization.
The complete Founder’s Edition covers 165 terms, 36 investor prompts, 12 financial drills, four deal-room simulations, and a 14-day study plan.
This sample is general educational information—not individualized legal, accounting, tax, or investment advice. Numerical illustrations are fictional.