Startup Dictionary
Glossary for founders, venture capital, and startups.
Acqui-hire
Buying a company primarily for the skills and expertise of its staff, rather than for its products or services.
Alpha
An early version of a product, often not feature-complete, used for internal testing.
Angel Investor
A high-net-worth individual who provides financial backing for small startups or entrepreneurs.
ARR
Annual Recurring Revenue; a key metric for subscription-based businesses showing yearly normalized revenue.
B2B
Business-to-Business; a model where a business sells products or services to other businesses.
B2C
Business-to-Consumer; a model where a business sells products or services directly to individual consumers.
Beta
A pre-release version of software given to a select group of users to try under real conditions.
Bootstrapping
Building a company from the ground up with nothing but personal savings and the luck involved.
Bridge Loan
A short-term loan used until a person or company secures permanent financing or removes an existing obligation.
Burn Rate
The rate at which a new company uses up its venture capital to finance overhead before generating positive cash flow.
CAC
Customer Acquisition Cost; the cost associated with convincing a customer to buy a product/service.
Cap Table
Capitalization table; a spreadsheet or table that shows the equity capitalization for a company.
Churn Rate
The percentage of subscribers who discontinue their subscriptions to a service within a given time period.
Cliff
A period of time (often one year) that an employee must work before their equity grants begin to vest.
Convertible Note
Short-term debt that converts into equity, typically in conjunction with a future financing round.
Cottage Business
A business that is not intended to scale massively but to provide a comfortable living for the founders.
Crowdfunding
Funding a project or venture by raising small amounts of money from a large number of people.
Customer Discovery
The process of interviewing potential customers to validate a business idea and understand their needs.
Deck
A presentation, often created in PowerPoint or Keynote, used to pitch a startup to investors.
Dilution
A reduction in the ownership percentage of a share of stock caused by the issuance of new shares.
Disruptive Technology
An innovation that significantly alters the way that consumers, industries, or businesses operate.
Down Round
A round of financing where investors purchase stock at a lower valuation than the preceding round.
Dragon
A startup that raises over $1 billion in a single round, or a portfolio company that returns the entire fund.
Due Diligence
A comprehensive appraisal of a business undertaken by a prospective buyer or investor.
Early Adopter
A person who starts using a product or technology as soon as it becomes available.
Ecosystem
A network of interconnected organizations (startups, investors, accelerators) that support business growth.
Enterprise
A large business or organization; often refers to software sold to large corporate clients.
Equity
The value of the shares issued by a company; ownership interest in a corporation.
Exit Strategy
A plan for how founders and investors will eventually profit from their investment, usually via IPO or acquisition.
Freemium
A business model where basic services are provided free of charge while more advanced features must be paid for.
Gamification
The application of game-design elements and game principles in non-game contexts.
Growth Hacking
Strategies focused solely on growth, often used by early-stage startups to get massive growth in a short time.
Hockey Stick
A chart shape showing a short period of stagnant growth followed by a sharp increase.
Incubator
An organization designed to accelerate the growth and success of entrepreneurial companies.
IPO
Initial Public Offering; the first time that the stock of a private company is offered to the public.
Iterate
To make repeated changes or improvements to a product based on feedback.
Lean Startup
A methodology for developing businesses and products that aims to shorten product development cycles.
Liquidity Event
An event that allows early investors and founders to cash out some or all of their equity.
LTV
Lifetime Value; a prediction of the net profit attributed to the entire future relationship with a customer.
Market Fit
The degree to which a product satisfies a strong market demand.
Monetization
The process of converting or establishing something into legal tender or cash.
Moonshot
An ambitious, exploratory and ground-breaking project undertaken without any expectation of near-term profitability.
MRR
Monthly Recurring Revenue; income that a company can reliably anticipate every 30 days.
MVP
Minimum Viable Product; a product with just enough features to satisfy early customers and provide feedback.
NDA
Non-Disclosure Agreement; a legal contract outlining confidential material that parties wish to share but restrict access to.
Network Effect
The phenomenon where a product or service gains additional value as more people use it.
Onboarding
The process of familiarizing a new customer or employee with a product or organization.
Pivot
A fundamental change in a business strategy when the current product or service is not meeting the needs of the market.
Pitch Deck
A brief presentation used to provide your audience with a quick overview of your business plan.
Platform
A group of technologies that are used as a base upon which other applications, processes or technologies are developed.
Post-Money Valuation
The value of a company after an investment has been made.
Pre-Money Valuation
The value of a company before an investment is made.
Product-Market Fit
Being in a good market with a product that can satisfy that market.
Proof of Concept
Evidence (typically derived from an experiment or pilot project) which demonstrates that a design concept is feasible.
Runway
The amount of time a company has before it runs out of money.
SaaS
Software as a Service; a software distribution model in which a third-party provider hosts applications.
Scale
To increase the size, magnitude, or extent of a business, often referring to revenue and customer base.
Seed Round
The first official equity funding stage; typically represents the first official money that a business venture raises.
Series A
The first round of venture capital financing for a startup after the seed round.
Series B
The second round of financing for a business through any type of investment including private equity investors and VCs.
Series C
A round of financing for later-stage companies that are looking to scale up or acquire other companies.
Shareholder
An individual or institution that legally owns one or more shares of the share capital of a public or private corporation.
Soft Launch
A preview release of a product or service to a limited audience prior to the general public.
Solopreneur
An entrepreneur who works alone, running their business single-handedly.
Stealth Mode
A temporary state of secrecy in which a startup company operates to avoid alerting competitors.
Sweat Equity
Contribution to a project or enterprise in the form of effort and toil, as opposed to financial contribution.
Synergy
The interaction of elements that when combined produce a total effect that is greater than the sum of the individual elements.
Term Sheet
A non-binding agreement setting forth the basic terms and conditions under which an investment will be made.
Traction
Evidence that a product or service is starting to be adopted by its intended user base.
Unicorn
A privately held startup company valued at over $1 billion.
User Acquisition
The act of gaining new users for an app, platform, or service.
User Experience (UX)
How a person feels when interacting with a system, including a website, web application, desktop software.
User Interface (UI)
The series of screens, pages, and visual elements—like buttons and icons—that you use to interact with a device.
Validation
The process of determining whether your product is of interest to a given target market.
Valuation
The process of determining the current worth of an asset or a company.
Value Proposition
A statement that summarizes why a consumer should buy a product or use a service.
Vaporware
Software or hardware that has been advertised but is not yet available to buy, either because it is only a concept or because it is still being written.
Venture Capitalist (VC)
An investor who provides capital to firms that exhibit high growth potential in exchange for an equity stake.
Vesting
The process by which an employee earns their shares or stock options over time.
Viral Loop
A mechanism designed to encourage users to share content or refer others, creating exponential growth.
Wireframe
A visual guide that represents the skeletal framework of a website or application.
Zombie Startup
A company that is generating enough revenue to operate but not enough to grow or provide a return to investors.
Acquisition
When one company purchases most or all of another company's shares to gain control of that company.
Advisor
An individual who provides advice and support to the startup's leadership team, often in exchange for a small amount of equity.
Board of Directors
A group of individuals elected to represent shareholders and oversee the management of a corporation.
Break-even Point
The point at which total cost and total revenue are equal, meaning there is no net loss or gain.
Buyout
The purchase of a controlling share in a company.
Capital Efficiency
The ratio of how efficiently a company is using its capital to grow revenue.
Cohort Analysis
A subset of behavioral analytics that takes the data from a given dataset and breaks it into related groups for analysis.
Conversion Rate
The percentage of users who take a desired action.
Crowdsourcing
The practice of obtaining information or input into a task or project by enlisting the services of a large number of people.
Decacorn
A privately held startup company valued at over $10 billion.
Elevator Pitch
A short description of an idea, product or company that explains the concept in a way such that any listener can understand it in a short period of time.
First Mover Advantage
The advantage gained by the initial ("first-moving") significant occupant of a market segment.
Flat Organization
An organization structure with few or no levels of middle management between staff and executives.
Founder
A person who establishes a company.
Go-to-Market Strategy
An action plan that specifies how a company will reach target customers and achieve competitive advantage.
Hackathon
A design sprint-like event in which computer programmers and others involved in software development collaborate intensively.
Intellectual Property (IP)
A category of property that includes intangible creations of the human intellect.
Landing Page
A standalone web page, created specifically for a marketing or advertising campaign.