Reference
Definitions & glossary
Definitions — what counts as a “small business,” what SAM.gov registration means, and every abbreviation used across the programs.
- 8(a) / HUBZone / WOSB / SDVOSB
- SBA certifications that make a business eligible for federal contracts set aside for socially/economically disadvantaged owners (8(a)), zone-located businesses (HUBZone), women-owned businesses (WOSB), or service-disabled-veteran-owned businesses (SDVOSB).
- 83(b) Election
- A filing made within 30 days of receiving restricted stock that lets a founder pay tax on its value at grant (usually near zero) instead of at vesting, which can matter a great deal for later tax treatment.
- Accredited Investor
- An SEC-defined income/net-worth (or professional-credential) threshold an individual must meet to invest in most private startup securities offerings.
- APEX Accelerator
- Formerly called a PTAC (Procurement Technical Assistance Center) — a free federal program helping businesses win and perform on government contracts.
- C-Corporation
- The standard corporate structure for a venture-backed startup — required for QSBS (Section 1202) eligibility and generally preferred by institutional investors.
- Cap Table
- The record of who owns what percentage of a company — founders, employees, and investors — and on what terms.
- CDFI (Community Development Financial Institution)
- A Treasury-certified lender (bank, credit union, or loan fund) with a mission to serve underserved communities — a common source of capital for founders who don’t fit conventional bank criteria.
- Due Diligence
- The investor’s review of a company’s legal, financial, and business records before closing a financing round.
- EIN (Employer Identification Number)
- The IRS-issued tax ID for your business — required before you can open a business bank account, hire employees, or apply for most federal programs.
- EB-2 NIW (National Interest Waiver)
- A self-petitioned green-card category that waives the usual job-offer and labor-certification requirement when a person’s work is judged to be in the US national interest.
- EB-5
- An investor green-card category requiring roughly $800,000–$1,050,000 placed at risk in a new US business that creates at least 10 full-time jobs.
- GSA Schedule (MAS)
- A long-term federal contract vehicle letting a company sell commercial products or services to any government buyer without a new bid each time.
- I-Corps
- NSF's Innovation Corps program — trains research teams in structured customer discovery before they commit to a product direction.
- ITC (Investment Tax Credit)
- A federal tax credit (IRC §48/48E) for clean-energy and storage property, worth 6% at a base rate and up to 30%+ with wage, apprenticeship, and other bonus adders.
- International Entrepreneur Parole
- A discretionary status (not a visa) letting a startup founder stay in the US based on the company’s outside investment or government-grant funding rather than personal credentials.
- LLC
- Limited Liability Company — flexible pass-through structure common for early-stage or bootstrapped businesses, but not QSBS-eligible and less common for VC-backed startups.
- MBDA
- Minority Business Development Agency — the only federal agency dedicated exclusively to growing minority-owned businesses; provides technical assistance, not direct funding.
- MEP (Manufacturing Extension Partnership)
- NIST’s nationwide network of centers giving small manufacturers hands-on help with process improvement and technology adoption.
- Manufacturing USA
- A network of 16 public-private manufacturing-technology institutes where companies can de-risk new manufacturing processes alongside industry and university partners.
- MRR / ARR
- Monthly or Annual Recurring Revenue — the standard way subscription businesses report predictable revenue to investors.
- NAICS code
- North American Industry Classification System code — determines which SBA small-business size standard (revenue or employee count) applies to your company.
- NMTC (New Markets Tax Credit)
- A federal tax credit that draws private investment into low-income-community businesses through certified Community Development Entities.
- Opportunity Zone
- A federally designated low-income census tract where investing capital gains through a Qualified Opportunity Fund can defer or eliminate capital-gains tax.
- Option Pool / ESOP
- Equity reserved for future employee grants, typically carved out of the cap table before a priced financing round.
- O-1A Visa
- A temporary US work visa for individuals with a documented record of extraordinary ability in business, science, or a related field — a common path for founders with a strong public track record.
- Pre-money / Post-money Valuation
- A company’s valuation before (pre-money) versus after (post-money) a new round of investment is added.
- QSBS (Qualified Small Business Stock)
- Stock in a qualifying small C-corporation that can qualify founders and early investors for a partial or full exclusion of capital-gains tax under Section 1202 of the tax code.
- R&D Tax Credit (Section 41)
- A federal tax credit for qualified research expenses; pre-revenue startups can apply up to $500,000/year of it against payroll taxes instead of income tax.
- Runway
- How many months a company can keep operating at its current spending rate before running out of cash.
- SBA
- US Small Business Administration — the federal agency behind most general-purpose small-business loans, loan guarantees, and the SBIR/STTR program.
- SBIR / STTR
- Small Business Innovation Research / Small Business Technology Transfer — non-dilutive federal R&D grant programs run by 11 participating agencies.
- SAM.gov
- System for Award Management — the required federal registry for any business that wants to receive a federal contract, grant, or certain federal set-aside.
- SAFE / Convertible Note
- Common early-stage fundraising instruments that convert into equity at a later priced round rather than setting a valuation up front.
- Series Seed / A / B
- Conventional labels for sequential priced venture-funding rounds, roughly ordered by company maturity and round size.
- SBDC (Small Business Development Center)
- A nationwide, SBA-funded network of roughly 1,000 centers offering free business consulting and low-cost training.
- SBIC (Small Business Investment Company)
- An SBA-licensed private fund that borrows government-guaranteed debt on top of its own capital to invest in small businesses as equity or debt.
- Term Sheet
- A non-binding document outlining the key terms of a proposed investment before the full legal financing documents are drafted.
- UEI (Unique Entity Identifier)
- The 12-character ID assigned via SAM.gov that replaced the older DUNS number in 2022; required for federal contracting and most federal grants.
- Vesting
- The schedule (commonly 4 years with a 1-year cliff) over which a founder or employee earns full ownership of granted equity.