Top 30 Commonly used Startup terms every entrepreneur should know

When embarking on the journey of starting a new business, seeking capital from investors is a pivotal step. Effectively conveying your company’s purpose and vision demands fluency in the language of the startup ecosystem, commonly referred to as startup lingo or jargon. When presenting your business to potential investors, it’s not only about explaining what your company does; it’s about using the right words that connect with them.

Following is the list of startup terms that every aspiring entrepreneur should know about:

Accelerator:-

An accelerator is an organization that acts as a support system for early age startups with mentorship, resources, and even funding opportunities to help a business grow quickly

Acquisition:-

Startup acquisition is a startup term that refers to the process in which one company buys another startup, often with the aim of gaining access to its technology, talent, customer base, or market share

Angel Investor:-

An angel investor is the investor who gives the first funding to a startup in exchange for ownership equity or convertible debt who actually believes in the startup’s idea or solution. Angel investors may also contribute their expertise, and industry connections

Bootstrapping:-

Bootstrapping is a method of building and growing a startup without relying on external funding instead raise funds from personal contacts like friends and family to fund its operations and expansion. Attractive benefit of bootstrapping is no loss of equity.

To conveniently and swiftly invest in shares, explore 👉 Groww! 👈

Burn Rate:-

For startup founders, understanding this particular startup term is crucial and ranks among the most important terms to be familiar with. It refers to the rate at which a company is spending its capital or cash reserves over a specific period. But it is usual for the startups to lose some money for several years before turning profitable

Churn Rate:-

Churn rate is a key metric that measures the percentage of customers or subscribers who discontinue using a product or service within a given period. It is a vital indicator for businesses based on a subscription model. Startups main goal is to keep churn rate as low as possible.

Co-Working Space:-

A co-working space is a startup term which that uses a shared workplace where individuals from different companies or freelancers work side by side in a shared environment. Co-working spaces are particularly well for startups because they can pay a smaller fee to use the shared facilities compared to renting or buying a full office

Cottage Industry:-

Cottage industry are startups that work best if they remain at a small scale these kinds of businesses would work well if they operated within a home rather than a conventional office space

Cash Flow:-

Cash Flow is the startup term that means money that flows into and out of your startup. A positive cash flow means there is more money coming in than leaving. A negative cash flow means more money is going out than coming in.

Cash Position:-

The amount of cash your startup has in its reserve at a single point in time. Monitoring cash position is essential for businesses to ensure they have enough funds to cover operating expenses, investments, and unforeseen circumstances

Crowd-Funding:-

Crowdfunding is a startup term in which fundraising is done by raising small amounts of money from a large number of people

Customer Acquisition Cost (CAC):-

The CAC is the total cost of acquiring a new customer. It encompasses various costs related to marketing, advertising, and sales to attract and convert potential customer

Dragon Startup:-

A dragon startup is a startup term which means startup that raises $1 billion in a single round of funding

Early Adopter:-

An early adopter is an influential client who uses your product or service long before the general public does. Businesses and product developers find early adopters valuable because they offer feedback, contribute to refining products, and play a key role in generating initial momentum for the adoption of a new offering

Exit Strategy:-

It is a plan that is executed by founder, an investor, or venture capitalist to liquidate a position in a financial asset or dispose of tangible business assets once goals are met.

Freemium:-

A common customer acquisition strategy for SaaS startups is offering a free plan for some features while a amount is charged for other features or services

Growth Hacking:-

Growth Hacking is a marketing startup term that was coined by Sean Ellis. It is a focused strategy using low-cost methods to quickly grow a company. Many companies these days turn to social media for growth hacking

Startup Incubator:-

The primary objective of a startup incubator is to help new businesses overcome challenges during their initial phases, fostering their growth and increasing their chances of success. Not only physical infrastructure, many incubators offer educational programs, workshops, and access to a network of experienced entrepreneurs and industry professionals

Lean Startup:-

The objective of adopting a “lean” startup approach is to swiftly and cost-effectively build and test products. This method prioritizes incremental improvement through trial and error method instead of creating a whole product which may not attract customers

Minimum Viable Product (MVP):-

A Minimum Viable Product (MVP) is the initial version of a product that includes only the essential features necessary to meet the needs of early adopters and gather feedback for further development without costing a fortune to make a full-fledged product before it has funding.

To conveniently and swiftly invest in shares, explore 👉 Groww! 👈

Pitch Deck:-

Pitch deck is startup term which means a concise presentation that entrepreneurs use to provide an overview of their business to potential investors or stakeholders. The goal of a pitch deck is to convey the business’s value proposition effectively, aiming to convince investors to explore funding opportunities for the venture.

Proof-of-Concept:-

A proof-of-concept (PoC) is a demonstration or experiment that aims to verify the feasibility and viability of a particular idea, concept, or technology. Proof-of-concept projects are common in various fields, including technology, research, and product development

Return on Investment:-

This startup term is used by many startup founders to evaluate the profitability or efficiency of an investment. ROI is a financial metric of profitability that is used to measure the return or gain from an investment made by an investor or businessman.

Seed Funding:-

Seed Funding round means initial financial round of funding, where the main aim is to raise capital for the starting of a startup. Seed funding is usually provided by angel investors, venture capitalists, or even friends and family who believe in the startup’s potential in return they get the equity in the startup

Sweat Equity:-

Sweat equity in the startup realm involves founders allocating a portion of the company’s equity to early employees. This recognition is a way of acknowledging the trust and dedication shown by these employees who believed in the vision and contributed their efforts, often at reduced salaries

Term Sheet:-

A Term Sheet is a document that outlines what an investor has agreed to on the terms and conditions under which the investment will be made. It serves as a template that can be used to develop more detailed legally binding documents.

Unicorn Startup:-

Unicorn is a startup term which means the startup has a valuation of over $1 billion. While these businesses are rare, they’re not quite as scarce as dragon startups.

Valuation:-

Valuation is about figuring out how much your company is worth, and there are two main stages to consider: pre-money and post-money valuation.

Pre-money valuation is like estimating the value of your company before you get any outside funding

Post-money valuation is the total worth of your company after you get funding

Venture Capitalist:-

Startups mostly come across these startup term when they are raising funds. VCs are seasoned investors who recognizes growth potential in your startup and provides funding in exchange for equity in your company

Zombie Startup:-

This startup term is mostly used for startups which have a valuation of over $1 Bn but still it struggles to achieve sustainable growth

FAQs