You need to know | Sunday Observer
The top 20 startup terms

You need to know

New to the startup world? You’re in the right place; our handy list busts the jargon for aspiring and early entrepreneurs alike. Ten years ago, many of these words didn’t really exist, or weren’t used in the same way. It’s only with the rise in startups across the globe that a whole new vocabulary has come about.

So much so, that lingo like ‘unicorn’and ‘pivot’ in the context of entrepreneurship are being used more and more by people outside the startup sphere.

Since you’re bound to come across these terms at some point (they’re sprinkled throughout our books and our site), here’s a handy resource to reference whenever you need to.

ACCELERATOR

Something to do with speeding down the highway? Not quite. An accelerator is an organisation or program that offers advice, mentorship and resources to help small businesses grow.

ANGLE INVESTMENT

This type of investment typically happens when a startup is in its early stages; it’s when an investor, or a ‘business angel,’ provides startups with initial or growth capital for a stake in the company. Having invested in big names like Google and Uber, CEO of Amazon Jeff Bezos is one of the world’s most well known angel investors.

BOOTSTRAP

Ever heard the phrase pulling oneself up by one’s bootstraps? Well, this term has evolved from it and it means to self-fund using personal resources, like friends and family, to get cash going.

BRIDGE LOAN

A loan taken out for a short-term period, typically between two weeks and three years, until long-term financing can be arranged. Also known as a swing loan.

BURN RATE

Quite literally, how fast you are spending your money. Alternatively referred to as a run rate, don’t be surprised if you hear this term being tossed around at industry networking events.

EXIT

Founders sometimes develop an exit business strategy before or during their entrepreneurial journey. An exit is a way to transition the ownership of your company to another company and pay back your investors.

INCUBATOR

An incubator differs from an accelerator in that it supports startups in their early development stages. It’s essentially an organisation that nurtures young firms during their first few months or years, usually in exchange for equity.

IPO (INITIAL PUBLIC OFFRING)

When a startup’s shares of stock are made public for the first time, it’s called an IPO. At this point, a private organisation turns into a public company.

LEAN STARTUP 

A method used to validate a business concept quickly and cheaply when founding a new company or introducing a new product.

MVP (MINIMUM VIABLE PRODUCT) 

A technique which involves the development of a basic version of a new product that aims to satisfy its early adopters. The product is then developed with further features only after considering feedback from initial users.

PITCH DECK

If you’ve ever had to pitch an idea to your boss before, you probably tried your best to be convincing. Similarly, a pitch deck is a short version of a business plan which presents key figures to potential investors in hopes of winning them over.

PIVOT

Much like its meaning when used to describe a mechanism turning on a central point, the term pivot in the startup world occurs when a company quickly changes directions after previously targeting a different market segment.

SCALE UP 

You can say you’ve scaled up when your company has grown in terms of size, geographical location, market and other relevant factors.The noun scaleup refers to a company that has already validated its product in a market and is economically sustainable.

SEED FUNDING

The first round of small, early-stage investment from family members, friends, banks or an investor is commonly referred to as seed funding.

STARTUP

Though there’s no universal definition of a startup, one that’s generally accepted is that it’s a company in the early or growth stages of operation, usually under three years old and (if not already) becoming profitable.

TERM SHEET/LETTER OF INTENT 

The document between an investor and a startup including the basic terms and conditions for financing which is commonly non-binding. Once an agreement is reached between the parties involved, a binding agreement based on the term sheet is drawn up.

UNICORN 

A company often in the tech or software sector worth over US$1 billion. Some well known unicorn startup companies include Tesla, AirBnB, Instagram and Shopify.

VC (VENTURE CAPITAL/ VENTURE CAPITALIST

Venture capital is financing provided by firms to small, high-risk, startup companies with large growth potential in return for equity. Investors working for venture capital firms that choose to invest in specific companies are typically called VCs.

VESTING

A process that involves giving or earning a right to a present or future payment, benefit or asset. ...and while words like ninja or guru may or not be considered jargon, since they’re increasingly being added to job titles at startups (Community Ninja, Sales Guru, etc.), we’ve added them here for good measure.

Courtesy: Startup Guide  

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