Accrued Interest

Intermediate 🚀 Startup / VC

Definition

Interest on convertible notes that automatically converts to equity at future rounds, making the note holders richer for waiting.

Example Usage

Our seed round had 8% accrued interest, so the $100K note became $108K in equity when we raised Series A.

Origin

Finance terminology; commonly applied to convertible debt instruments in startup funding.

Fun Fact

Accrued interest can significantly increase investor ownership without additional capital contribution.

Source: Startup financing and debt instruments

Related Terms

Intermediate

down-stack

Moving to build or sell products at a lower layer of the technology infrastructure, typically where margins are thinner but the market is larger. Often happens when companies realize their original niche is too small.

🚀 Startup / VC
Intermediate

full-stack startup

A company that owns and controls every layer of its product or service delivery, from manufacturing to customer experience, rather than relying on existing infrastructure or platforms. It's vertical integration for the startup age.

🚀 Startup / VC
Advanced

carve-out

Reserved portion of an acquisition's proceeds specifically allocated to employees or specific shareholders, ensuring they benefit even if the waterfall would otherwise drown them. Exit sharing mandated by negotiation or generosity.

🚀 Startup / VC
Advanced

pre-emption rights

The contractual right of existing investors to lead or participate in the next funding round before the company can seek outside investors. It's a first-look deal built into your cap table.

🚀 Startup / VC
Beginner

homegrown

Built entirely in-house by internal team without external consultants or enterprise solutions; a diplomatic term meaning 'we did this ourselves with our budget and talent level.'

🚀 Startup / VC
Beginner

launch

The moment when something new is officially unleashed upon the world, whether it's a product, company, or ship sliding into water. In business and tech, launches involve coordinated marketing campaigns, press releases, and the collective hope that people will actually care. It's the corporate equivalent of a grand opening, complete with champagne (or energy drinks, depending on the industry).

🚀 Startup / VC

Translate This Term

See “Accrued Interest” in Corporate Speak, Gen-Z Slang, Pirate Speak, and more.

Try the Translator

Share This Term

Post on XShare on FacebookShare on LinkedIn

Discover a Term

Intermediate

permissive environment

An operational area where host nation forces have control and there is minimal threat to friendly forces. Essentially a ...