Startup Terminology You Need to Know!

The startup world operates on a lot of terminologies. Here we give you a list of startup terminologies and their brief definitions.

A/B Testing: is a method of comparing two versions of a product or service to determine which one performs better.

Accelerators: Also referred to as an incubator, an accelerator is a program designed to rapidly grow a startup through a combination of mentorship, access to technology, office space, and, sometimes, capital.

Accounting: Accounting is the systematic process of recording, summarizing, analyzing, and interpreting financial transactions and information to facilitate informed decision-making.

Accounts payable: Accounts payable refers to the debts and obligations that a business owes to its suppliers, vendors, or creditors for goods and services received but not yet paid for.

Accounts receivable: Accounts receivable is the amount of money that a business is owed by its customers or clients for goods sold or services rendered, which are yet to be collected.

Accrual basis: Accrual basis is a recording of transactions when earned/incurred, not just when cash changes hands, for more accurate financial representation.

 Accruals: Accruals are adjustments made in accounting to recognize revenues earned or expenses incurred, regardless of cash movements, ensuring accurate financial reporting.

Acqui-hiring: Acqui-hiring is the process of acquiring a company primarily for its talent rather than for its products or services. It allows one to receive a team of talented employees and gain access to their skills and knowledge.

Agripreneur: Agripreneur is an entrepreneur who applies their business acumen and skills to the agricultural industry, they develop innovative solutions for the farmers and consumers.

Angel investor / Business angel: An angel investor is an individual who provides capital for a business startup, in exchange for convertible debt or ownership equity.

Acqui-Hire: Acquisition+ Hire, usually by big companies to Hire the people working at the startup rather than use the product they are creating.

Activation: Another word for a product or company launch.

Agile Development: Agile development typically means that it is fast to change, adaptable, and that you are continuously improving your product.

Aggregate demand: Aggregate demand is the aggregate quantity of products and services requested within an economy, at a specific overall price level, and during a particular timeframe.

Algorithm: An algorithm is a collection of guidelines employed to carry out a particular undertaking, such as solving a mathematical puzzle or arranging data.

Alignment: Alignment describes how a corporation supports its objectives through its activities. To be most effective, all open roles and responsibilities should be in line with a specific objective.

 Analytics: Utilizing information to guide the process of making choices.

Angel Investors: Someone who invests in promising startups, and sometimes also helps with advice and contacts.

Ask: The act of soliciting money, advice, or coaching from others as part of pitching a business idea.

Asset: An item of value in the form of cash, inventory, equipment, buildings, etc., that helps a business operate and make money.

Automation: Automation involves using technology and processes to perform tasks, operations, or workflows with minimal human intervention, aiming to increase efficiency, reduce errors, and streamline repetitive activities.

B2B: B2B explains interactions that occur between one business entity and another.

B2C: B2C explains interactions involving ‘business-to-consumer’ transactions.

B2G: B2G Explains interactions classified as ‘business-to-government’ transactions.

Balance sheet: A financial statement that summarizes a company’s assets and liabilities and the shareholder’s equity at a specific point in time.

Ballpark: An estimate that falls within the required range is referred to as being in the “ballpark” in business. A project’s stakeholders will know they are making progress toward a certain goal when you say something is “in the ballpark.”

Bandwidth: The phrase “bandwidth,” which was adapted from the technology sector, is now frequently used to indicate how much time or effort a person can devote to a project. The capacity of a person to accept new assignments or more work is referred to as their bandwidth level.

Bankruptcy: Bankruptcy is a legal procedure where an individual or a company incapable of settling its debts is released from any future obligation regarding those debts and is provided with a new opportunity to begin anew.

Beginning cash:  The amount of money used to start a new venture.

Big data: The vast quantities of information gathered by marketers and other organizations are referred to as “big data.” This popular phrase is used to help clarify extremely complex sets of information. Market analysis and the discovery of purchasing patterns can be done with big data.

BoFu: Bottom of the funnel refers to the concluding phases of the sales funnel where purchasing takes place

Bootcamp: A short, intensive training program that provides entrepreneurs with the skills and knowledge needed to start and run a business.

Bootstrapping: When a company relies on savings from family and friends.

Bottom line: The amount of money a business has left after deducting all costs from revenue.

Bounce Rate: The proportion of individuals who exit your website shortly after arriving.

Bond: A bond is a debt instrument created by a company or government, which assures the payment of regular interest and the return of the principal amount upon reaching maturity.

Branding: Branding is crafting a distinctive identity and impression for a product or company within the perceptions of consumers.

Broad Agency: A broad agency refers to an organization or entity that has a wide scope or mandate, often involving a range of activities, services, or responsibilities within a particular field or sector.

Business cycle: The business cycle is the regular and inherent variation in economic performance, marked by phases of growth and decline.

Break-even point: The time when revenues (sales) equal the expenses of a business, often considered a key metric for measuring the success of a business.

Bridge loan: Bridge loans are short-term loans designed to provide temporary financing until a more permanent form of financing is obtained. 

Burn Rate: How quickly the company burns through the capital.

Business alliance: A partnership, usually involving key partners, in which two or more companies cooperate to maximize revenues for all.

Business model: A design for the successful operation of a business that identifies revenue sources, customer base, products, resources, and financing sources.

Business pitch: A brief presentation of a business idea or plan to prospective investors or other parties.

Business plan: A business plan is a written document that describes in detail the vision and goals of the new business and how it will achieve both.

Capital: Capital is an asset like funds, structures, and tools employed for the creation of products and services.

Cash flow: The total amount of money that comes into a business from sales and goes out of a business in the form of expenses.

Cash inflow: Money that comes into a business, usually in the form of sales. It can also be an infusion of cash from investors, family, or loans.

Cash outflow: Money that a business pays for supplies, salaries, and other expenses.

Churn Rate: The rate at which customers stop using a product or service over a specific period.

Cliff: Cliff is a tool for automated testing of command-line applications. Cliff uses a Python-based scripting language to define tests and a web-based interface for running and managing tests.

Cliff Vesting: Cliff vesting is a type of vesting schedule used in employer-sponsored benefits plans, such as retirement plans. 

Cold Calling: Cold calling is a sales technique in which a salesperson contacts potential customers who have not expressed a prior interest in their product or service, with the aim of initiating a conversation and generating sales opportunities.

Collateral: Something of value that is pledged to cover the payment of a loan. If the loan isn’t paid back, the lender can take ownership of the item.

Commission: Money that is paid to an employee or a reseller upon selling a certain amount of goods or services. It is usually a percentage of the sale.

Content is king: The saying “content is king” underlines how crucial it is to provide engaging and practical language or design in order to draw buyers to a product. Businesses that employ online content like blog postings to entice people to test their products frequently hold the belief that content is king.

Conversion Rate: The percentage of website visitors who take a desired action, such as making a purchase or filling out a form.

Cooperative: A business organization owned by its members, who share in the profits and losses

Core competency: “Core competencies” are a business’s most crucial traits and ideals. They may also list a job applicant’s specific qualifications.

Cost structure: A method to determine how much it will cost a company to produce a product and how much profit the product will generate.

Cottage business: Cottage businesses are small businesses that often require low startup costs since many of the materials and supplies needed to create the products can be found at home or online.

Co-working Space: A co-working space is a shared workspace where individuals from different companies or professions work alongside each other in a collaborative and flexible environment, often equipped with amenities and services that promote networking and productivity.

Cross-selling: Selling products related to those that a business is already offering.

Crowdfunding: Raising funds for a project or business from a large number of people through online platforms.

Customer acquisition cost: All expenses incurred to attract a paying customer.

Customer base: All of a business’s existing customers.

Customer “check-in”: An after-sale activity that aims to ensure that customers are satisfied.

Customer journey: Every engagement a consumer has with a firm, from their first interest in a product to requests for support after completing a purchase, is referred to as the “customer journey.”

Customer segmentation: Dividing customers into groups that share similar characteristics. Customers within a segment should respond to similar marketing.

Dave Ratio: A way of understanding the gender gap in startups. How many women are in the company for every man named Dave? Carnegie Mellon University did a study and realized it had more men named Dave in its computing programs than women. Since then it has taken steps to accommodate this gap.

Demand: It is refer to the consumers’ desire and willingness to pay for a specific product or service.

Debt: Debt is unpaid funds possessed by an individual or business that are owed to a different individual or business.

Deep Dive: In business, a “deep dive” is a more in-depth kind of brainstorming. A manager who wants a deep dive into a subject is asking for a thorough examination of all ideas that could be based on that subject.

Depreciation: Depreciation is the allocation of the cost of a long-term asset, such as a building or equipment, over its useful life.

Digital Marketing: Digital marketing employs online methods to promote products or services and connect with a specific audience through channels like social media, search engines, and email.

Discovery Phase: The Discovery Phase is a period of research and analysis that takes place at the beginning of a project. 

Distribution: The movement of goods to stores and other businesses that sell to consumers.

Direct marketing: Direct marketing is a  marketing strategy aiming to directly connect with customers, bypassing middlemen, using techniques like telemarketing, email, or direct mail.

Distribution channel: A business or a chain of businesses or intermediaries through which a product or service passes to reach consumers.

Disruptive technology: Disruptive technology is a term used to describe a new technology that significantly changes the way existing products or services are used or produced, disrupting the existing market and displacing established market leaders. 

Drill down: The method of identifying a problem’s underlying causes is referred to as “drilling down.” This catchphrase is frequently used to inspire workers during a challenging problem-solving process. 

Diversity: Diversity is a range of viewpoints and life encounters within a company or organization, encompassing variations in terms of race, gender, ethnicity, sexual orientation, and age.

Dividend: A dividend refers to a fraction of a company’s profits that is distributed to its shareholders.

Early Adopter: An early adopter is a person or business that is among the first to acquire and use a new technology, product, or service. 

EBITDA: It stands for Earnings Before Interest, Taxes, Depreciation, and Amortization. It’s a measure of a company’s overall financial performance.

Ecosystem: The various components of an office setting can be described using the term “ecosystem,” just as they can be described using the term “natural environment.” The firm culture, practices, and policies are part of the office ecology.

Elevated Pitch: Elevated pitch can be used to make a startup business sound more exciting and engaging, but it is not necessarily related to startup businesses. It is more commonly used in speech and music.

Elevator Pitch: An elevator pitch is a short, not more than 60 to 90 seconds, persuasive speech that is used to spark interest in a product, service, or idea. 

Enterprise: Enterprises are large businesses involved in diverse commercial activities to generate revenue and expand.

Entrepreneur: An entrepreneur is an individual who identifies opportunities, takes risks, and creates and manages a business with the aim of achieving financial success and innovative growth.

Equity: Equity means a share of ownership in a business; it can have other meanings as well. Buying equity means buying shares in a company. It’s the value of a company divided into many equal parts owned by shareholders, or one of the equal parts into which the value of a company is divided.

Evangelist: Evangelist is the person responsible for developing relationships with key stakeholders, promoting the company’s message, and creating interest and excitement about the company’s offerings.

Exit: An exit is when you successfully reached critical mass, built a product people love, received investments (usually), and a larger company in your market purchased you for a large amount of money. For example, Instagram exited for $1 billion when Facebook acquired them.

Exit Strategy: A plan for how investors and founders will cash out of a business, such as through a sale or IPO.

Fixed cost: An expense that does not change with an increase or decrease in the number of goods or services produced or sold.

Facebook Marketing: Using the Facebook platform to promote products, services, or brands through various strategies such as creating engaging content, targeted advertising, and building a community to reach and engage with a specific audience.

Freemium: This trendy phrase, which combines the words “free” and “premium,” refers to leveraging free material to draw in new clients.

Funding: money provided, especially by an organization or government, for a particular purpose.

Finance: Finance involves the management of money, assets, and investments, including activities like budgeting, investing, borrowing, and financial planning to ensure the effective use and allocation of resources.

FinTech: FinTech is the computer programs and other technology used to support or enable banking and financial services.

Fixed cost: An expense that does not change with an increase or decrease in the number of goods or services produced or sold.

General partnership: A form of business organization in which two or more individuals own a business together and share in the profits and liabilities.

Green Business: A green business, also known as a sustainable or eco-friendly business, is an enterprise that prioritizes environmentally responsible practices, aiming to minimize its negative impact on the planet while pursuing economic success.

Growth hacking: Growth hacking is a marketing strategy that focuses on fast and efficient experimentation across marketing channels to identify the most effective and efficient ways to grow a business. 

Hockey stick: A hockey stick is used to describe a business’s growth or performance, where a sudden and dramatic increase is seen, resembling the shape of a hockey stick.

Holistic: When solving a problem, a “holistic” approach considers all relevant components and tackles all aspects of the situation. Many managers advise staff to approach a subject from all angles in order to fully comprehend it.

Hyperlocal: Issues that are “hyperlocal” are those that are exclusive to a town or region. Businesses use the term “hyperlocal” to motivate staff to maintain attention on a certain market.

Impact: “Impact” in business refers to the influence a business or its employees may have on their workplace, clients, or community. This trendy phrase may motivate workers to concentrate on changing the world and tracking their progress.

Incentivize: “Incentivizing” is a technique for inspiring clients or staff to make a purchase or provide excellent work. Incentives are created by businesses, such as rewards programs, to support their operations.

Incubation: Incubation is the name given to the process, wherein an individual or an organization supports the establishment and growth of a start-up.

Incubator: A business incubator is a company that helps new and startup companies to develop by providing services such as management training or office space.

Initial Public Offering (IPO): The first time a maturing business offers ownership shares to members of the public in order to raise capital.

Intellectual property: The legal protection of your original ideas, inventions, and creative works.

Invoice templates: Invoice templates are pre-made formats used by businesses to create clear and consistent bills for goods and services provided to clients.

Iteration: The process that the founders of a tech startup used to continuously change and improve their product.

Key activity: A task or a project that is essential to a business and helps make its products or services unique and valuable to customers.

Key cost: An expense associated with a product or service that supports a business’ value proposition.

Key partner (ally): An individual or company that is essential to a business’s success.

Key Performance Indicator (KPI): Key Performance Indicators, are metrics used to measure the success of a business or specific project.

Key resource: An item, such as a raw material or specialized knowledge, that is essential to a business’s operations.

Lean Methodology: A business tool to continually evaluate your company’s performance and make improvements.

Lean startup:  A methodology for launching and running a business that emphasizes quick experimentation and iteration based on customer feedback.

Liability: A company’s financial debt or obligations that arise during the course of its business operations.

Limited partnership: A form of business organization in which two or more partners unite to conduct business together. Partners share losses and profits based on how much each has invested.

Loan term: The time a borrower has to pay back, or renegotiate, a loan.

Logistics: Many businesses refer to the coordination and management of a project or event as “logistics.” It is common to refer to specifics as logistics to stress how crucial they are.

Launch: Launch is the process of introducing a new product, service, or business to the market. 

Market readiness: A condition in which there are enough customers willing to buy a product or service so that the business producing the goods or services can be economically sustained.

Market research: The process of gathering information about your target customers and the industry you operate in.

Market Segmentation: Dividing a market into distinct groups of customers with similar needs and characteristics.

Move the needle: When employers encourage their staff to “move the needle,” they mean to make a significant change that will have an impact on their sector. Influential people are those who have a significant impact on a business or a community.

MVP: Minimum Viable Product (MVP) is a concept introduced by Eric Ries. It is the version of a new product that allows a team to collect the maximum amount of validated learning about customers with the least amount of effort.

Net cash flow: The amount of money left after cash outflows (expenses) is subtracted from cash inflows (revenue).

Networking: Networking is an activity aimed at creating a group of acquaintances and associates and keeping it active through regular communication for mutual benefit.

Next generation: The term “next generation” refers to fresh goods or clients. Typically, it alludes to new developments and potential adjustments to the market.

Online Business: An online business is a commercial venture that operates primarily or entirely over the Internet, encompassing activities such as e-commerce, digital services, and virtual communication with customers.

Operational cost: An expense incurred to keep a business up and running, such as rent, utilities, and taxes.

Outsourcing: Outsourcing is the practice of delegating specific tasks, functions, or processes of a business to external third-party companies or individuals to reduce costs, increase efficiency, or access specialized expertise.

Pain point: A firm or its clients’ issue is referred to as a “pain point.” It can be emphasized that problems can be resolved and improved upon by referring to them as pain points.

Ping: The term “ping,” which was once primarily associated with computer technology, is now frequently used to indicate sending a message or informing colleagues of fresh information. Emails, instant messages, and other office communications can all be considered pings.

Pitch Deck: A short presentation used to pitch your business plan to potential investors.

Pivot: Changing the direction of your company because users want a different use from the product.

Post-Money Valuation: What you are worth after receiving an investment.

Pre-Money Valuation: How much is your company worth before you get money from investors?

Product-Market Fit: Product-Market Fit is the degree to which a product meets the needs of a particular market. It measures how well the product meets customer needs and how well the product sells in the market.

Product Roadmap: Product roadmaps can serve as a tool to align product teams and business objectives, help teams prioritize tasks, and track progress and performance.

Profit: It’s the revenue remaining after all costs are paid. These costs include labor, materials, taxes, etc.

Public company: A company that has sold shares through an initial public offering and is traded on a stock exchange.

Quick win: A project or sale that is simple to accomplish is referred to as a “quick victory.” Quick victories can be encouraged by management to raise staff morale.

Quota: The quantity of work that must be completed within a specific time frame is referred to as a “quota.” It may relate to figures like sales targets or the necessary staffing levels.

Referral selling: Acquiring new customers from existing customers.

Revenue: It’s the total income generated by the sale of goods/services related to the company’s primary operations.

Revenue model: A plan that identifies which revenue sources to pursue, what value (goods/services) to offer, how to price goods/ services, and which types of customers (market segments) will buy the goods/services.

Retargeting: Retargeting is the practice of businesses contacting clients who have already expressed interest in their goods by visiting a website. It motivates marketing teams to follow up on touchpoints and chase potential clients.

Return On Investment (ROI): ROI is a financial ratio used to calculate the benefit an investor gets in relation to their investment cost.

Runway: The amount of time a startup has until it runs out of cash.

SaaS: Software as a Service. Instead of downloading a very large software that probably slows your own computer, a person may use the software as a service from another company.

Scalable: Scalable are those businesses that are able to grow quickly and efficiently without incurring disproportionate increases in operational costs or complexity. 

Scalability: Scalability is whether or not your business can handle the influx of millions of users.

Scaling: Scaling refers to the process of increasing or decreasing the size of a company’s operations for the purpose of improving profitability, efficiency, or market reach.

Sciencepreneur: Sciencepreneur is an individual who leverages scientific knowledge and principles to create innovative products, services, or businesses that bridge the gap between scientific research and commercial applications.

Seed A Round: Series A round where you typically approach VCs (venture capitalists) for anywhere between $1 million and $5 million…and sometimes more.

Seed Funding: The initial capital raised by a startup to develop the product or service.

Seed Round: The seed Round is usually the first institutional round typically from angel investors (wealthy individuals who usually invest $100k to $500k). Usually, when you are raising your Seed Round you’ve already gone through what’s called a Friends and Family Round.

Software as a service (SaaS): Software as a service (SaaS) is a software licensing and delivery model in which software is licensed on a subscription basis and is centrally hosted.

Sole proprietorship: A business owned and run by one person; the simplest form of a business.

Solopreneur: A solopreneur is an independent entrepreneur who works independently and runs their own business. 

Startup: A startup is a new business venture/enterprise in its initial or early stages of development. These stages include the concept, seed, early, growth, and mezzanine stages.

Startup capital: The money that is required to start a new business.

Stockholder: A stockholder, also known as a shareholder, is an individual, company, or institution that owns at least one share of a company’s stock, which is known as equity.

Sustainability: The term sustainability describes how effectively a project utilizes its resources and its capacity for self-support. It can also be applied to the way a business engages with the environment.

Sweat equity: Sweat equity is the amount of effort or labor an owner or investor puts into a business that is not compensated financially. 

Synergy: Synergy is the term used to describe a group of people who work effectively together and create content of a high caliber.

Team culture: Team culture is the collective norms and behaviors that shape how a group collaborates and works together.

TechStars: Almost always ranked top 2nd best accelerator.

Term sheet: A term sheet is a document used in venture capital and private equity transactions to summarize the key points of a proposed investment.

Touchpoint: Consumer interaction with a brand is called a “touchpoint.” Customer service agents, real-world stores, websites, and applications are all examples of touchpoints. Businesses stress the need of using touchpoints to give customers a satisfying experience.

UI: User Interface, refers to the visual and interactive design elements of a product or service that allow a user to interact with it, including buttons, menus, and screens.

Unbundling: A marketing technique in which goods or services once offered as a whole are sold separately as individual parts at prices that make their sum more profitable.

Unicorn: Unicorn refers to a privately held startup company valued at over $1 billion. These companies are often characterized by their high growth potential and disruptive technology.

Unpack: In business, “unpacking” a problem is thoroughly examining all relevant issues. This term frequently denotes examining a certain event or project by dissecting each component, employing the metaphor of unpacking a bag.

Upselling: A sales technique through which a seller induces the customer to purchase more expensive items, upgrades, or add-ons in an attempt to make a more profitable sale.

UX: User Experience, refers to the overall experience and satisfaction a user has when interacting with a product or service, including its usability, accessibility, and design.

Value-adding paradox: The value-adding paradox occurs when efforts to enhance a product’s value lead to unintended negative outcomes, possibly due to increased complexity or misalignment with customer expectations.

Value proposition: A business or marketing statement that summarizes what is unique about a product or service and why customers will find the product or service valuable.

Variable cost: Variable cost is a cost that changes in relation to production volumes or sales, such as raw materials or sales commission.

Venture Capital: Venture capital (VC) is a form of financing that is provided by firms or funds to small, early-stage, emerging firms that are deemed to have high growth potential, or which have demonstrated high growth.

Visibility: The term “visibility” is frequently used in marketing to indicate how well-liked a company or product is in a given market. Businesses need visibility in order to boost sales and establish a positive reputation.

White Hat Link: A white hat link refers to a legitimate and ethical backlink from one website to another, obtained through honest and authorized means, in compliance with search engine guidelines, and without attempting to manipulate search rankings.

Womenpreneur: Womenpreneur is a female entrepreneur who establishes and manages her own business, taking on leadership roles and contributing to economic growth and innovation.

Youngpreneur: A Youngpreneur is a young individual who demonstrates entrepreneurial qualities and engages in business ventures or initiatives at a relatively early age, showcasing innovation and a proactive approach to business.

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