Plain English

Read any report here without a finance degree.

Every term used in a 710 Angels scoring report, explained without jargon. Keep this page open beside a report and nothing in it should be a mystery.

The round itself

Words that describe how money comes in and what it buys.

Round: One batch of fundraising. A company raises a round, spends it, then raises the next one.
Pre-seed / Seed: The first two rounds. Pre-seed usually buys a first product; seed usually buys first real customers.
SAFE / convertible note: Money now, shares later. The price of those shares is fixed at the next priced round instead of today.
Pre-money / post-money valuation: What the company is judged to be worth before the new money goes in, and after it goes in.
Dilution: The share of the company existing owners give up when new shares are issued.
Runway: How many months the company can keep operating before the bank account runs out.
Cap table: The list of who owns how much of the company.
Pro rata: The right to put more money into a later round so your ownership percentage does not shrink.

The arithmetic behind whether growth is worth paying for.

Unit economics: Whether one sale, one customer or one order makes money once all its costs are counted.
Gross margin: What is left from a sale after the direct cost of delivering it.
Contribution margin: What is left after every cost that grows with each extra sale, including support and shipping.
CAC (customer acquisition cost): What it costs, all in, to win one paying customer.
LTV: The total profit expected from one customer over the whole relationship.
Payback period: How long it takes for a customer to repay what it cost to win them.
Churn / retention: How many customers leave, and how many stay and keep paying.
ARR / MRR: Yearly or monthly revenue that repeats, as opposed to one-off sales.
Burn rate: How much cash the company spends each month beyond what it earns.

The part investors argue about most.

Moat / defensibility: The reason a well-funded competitor cannot simply copy this and take the customers.
Switching cost: The pain a customer would go through to leave for a rival — the higher it is, the stickier the business.
Proprietary data: Data only this company has, which makes its product better the more it is used.
AI displacement risk: The chance that a general AI tool or a large AI company makes this product unnecessary within a year or two.
Freedom to operate: Confidence the company can sell without infringing someone else's patent.
TRL (technology readiness level): How far a technology has been proven: from an idea on paper, through lab tests, to working in the real world.

Whether a good business is also a venture-sized one.

Room for the valuation to grow: Whether this company can be worth several times more at the next round, not just profitable at today's size.A steady, profitable business can still be a poor fit for angel money if its value never multiplies.
TAM / SAM / SOM: The whole market, the slice this company can actually sell to, and the slice it can realistically win soon.
Exit: The event where investors get their money back: a sale of the company, or a listing on a stock market.
Multiple: A shorthand price: a company valued at 8× revenue is priced at eight times what it sells in a year.
Down round: A new round priced lower than the last one. Earlier investors lose value.
Bridge round: A small raise to buy time until a proper round can be raised.

How to read the report itself.

Evidence strength: Whether a judgement rests on a document, on partial proof, or only on what the founder says.
Confidence: How much weight the whole read can carry, based on how complete the uploaded material is — not on how good the company is.
Not covered: The material never addresses this point, so it is left out of the score rather than counted as a weakness.
Falsifier: A check that would prove a judgement in the report wrong.
Use of funds: The plan for where the raised money goes, line by line.

Something still unclear in a report? Ask the 710 Angels team and we will add it here.