Entrepreneurial Dictionary for Startups

A Startup Ecosystem

is formed by people, startups in their various stages and various types of organizations in a location (physical or virtual), interacting as a system to create and scale new startup companies. These organizations can be further divided into categories such as universities, funding organizations, support organizations (like incubators, accelerators, co-working spaces etc.), research organizations, service provider organizations (like legal, financial services etc.) and large corporations. Local Governments and Government organizations such as Commerce / Industry / Trade departments also play an important role in startup ecosystem.

Entrepreneurship

The process of designing, launching and running a new business. The people who create these businesses are called entrepreneurs.

Entrepreneur

A person which has the ability to find and act upon opportunities to translate inventions or technologies into products and services. An entrepreneur is able to recognize the commercial potential of the invention and organize the capital, talent, and other resources that turn an invention into a commercially viable innovation.

Startup

A startup company is a company in the early stages of operations. Startups are usually seeking to solve a problem of fill a need, but there is no hard-and-fast rule for what makes a startup. A company is considered a startup until they stop referring to themselves as a startup.

Accelerator

Startup accelerators are fixed-term, cohort-based programs that include, connections, sales, mentorship, educational components, and end in a public pitch event or demo day Accelerator
A hub where startups are given mentorship, space to work on their ideas and sometimes seed capital

Deck (Aka Pitch Deck)

A presentation that covers all aspects of your business in a succinct and exciting way.

Early Adopters

The first users of your product. They will typically be key influencers and active on social media. They will give you your most honest and sometimes overly direct feedback.

Ecosystem

As with an ecosystem in nature, a startup ecosystem has its food chain. There are the hunters, the herd and the bottom feeders. Work out where you are and where you want to be then get involved in your startup ecosystem. If the city you are in doesn’t have incubators, accelerators, co-working spaces, mentors and investors, you should a). move to another city, or b). start your own ecosystem.

Mentor

A more experienced or more knowledgeable person who helps to guide a less experienced or less knowledgeable person The mentor may be older or younger than the person being mentored, but he or she must have a certain area of expertise.

Innovation

Modern meaning is “a new idea, creative thoughts, new imaginations in form of device or method“. Innovation is often also viewed as the application of better solutions that meet new requirements, unarticulated needs, or existing market needs

Angel Investor

Individual who provides a small amount of capital to a startup for a stake in the company. Typically precedes a Seed Round and usually happens when the startup is in its infancy.

NDA

Non-disclosure agreement. An agreement between two parties to protect sensitive or confidential information, such as trade secrets, from being shared with outside parties.

Pivot

The act of a startup quickly changing direction with its business strategy. For example, an enterprise server startup pivoting to become an enterprise cloud company.

B2B / B2C

Business to business. This describes a business that is targeting another business with its product or services. B2B technology is also sometimes referred to as enterprise technology. This is different from B2C which stands for business to consumer, and involves selling products or services directly to individual customers.

Bootstrapped

A company is bootstrapped when it is funded by an entrepreneur’s personal resources or the company’s own revenue. Evolved from the phrase “pulling oneself up by one’s bootstraps.“

Traction

Proof that your executive summary (hypothesis) is working. People are actually buying your product or using your service. This is one of the most exciting times in a startup!

Due Diligence

An analysis an investor makes of all the facts and figures of a potential investment. Can include an investigation of financial records and a measure of potential ROI.

Exit

This is how startup founders get rich. It’s the method by which an investor and/or entrepreneur intends to “exit” their investment in a company.

Proof Of Concept

A demonstration of the feasibility of a concept or idea that a startup is based on.

ROI

This is the much-talked-about “return on investment.” It’s the money an investor gets back as a percentage of the money he or she has invested in a venture.

Seed

The seed round is the first official round of financing for a startup.

Term Sheet

A non-binding agreement that outlines the major aspects of an investment to be made in a company.

Angel Investor

An individual who invests his or her own money at an early stage in exchange for a share of the company.

Freemium

You give the basic product away for free and then try to upsell features to your customers

IP = Intellectual Property

This can be a patent (costs $25k generally and takes time to obtain) or a secret sauce or formula like Coke. Not every startup has IP, but if your business depends on it, you better protect it! This covers patents, trademarks and copyrights. It is a good way to protect your “secret sauce”.

Lean Startup

Proving the business concept as quickly and cheaply as possible. The main idea behind this is based on how startups can invest their time into repeatedly building products or services to meet the needs of early customers.

MVP = Minimum Viable Product

The bare-bones version of a product required to achieve proof of concept

Traction

Proof that people are actually buying and using your stuff.

Unicorn

A startup company that is valued at over $1 billion is called a unicorn.

Pre- Accelerator

An accelerator that focuses on the ideas validation stage. Usually lasts for 4-8 weeks.

Brainstorm

Brainstorming is to generate new ideas around a startup

Bootcamp

is the go-to for strategy spanning a multitude of industries, experienced in working with companies ranging from smaller personal brands to larger professional services.

Hackethon

is an event where people come together to creatively solve problems.

Round Table

an opportunity for founders to meet potential future investors in a casual, informal setting

Implementation

Implementation is the process of putting a plan into effect or executing on the agreement made between you the buyer and the Company.

Go to market

A “go to market strategy” outlines how your startup plans to deliver your product to customer.

Deploy technology

to allow companies to smooth their cash flow.

Advisor

An person who provides the entrepreneur with guidance, contacts, advice and support, often in return for a small stake in equity.

Balance Sheet

A concise financial statement showing the existence and total value of the assets, liabilities and resources of a company on a particular date

Bubble

An industry that does not know it could be overvalued and over-inflated

Burn Rate

A startup's monthly negative cash flow.

Cash Flow Statement

Reconcile the initial cash balance to the end of the cash balance by displaying the sources and uses of cash from sales, expenditure and funding activities

Corporate Venture

An acquisition from one company to another, usually early for strategic reasons

Crowdfunding

A joint effort by many individuals to support a cause, project or company.

Deal Lead

The investor or investment company is solely responsible for organizing a corporate investment round.

Debt

Borrowed money that needs to be paid back

Duty Of Loyalty

A fiduciary obligation of a board of directors requiring a manager to place stockholder s ' interests ahead of their own interests

Franchise Tax

A yearly tax for conducting business as a separate legal “person” from its owners

Grant

A government agency or other entity offers money that does not need to be repaid and does not buy equity

Independent Contractor

A specific classification of worker that is not an employee of the company.

Issued Shares

The total number of shares that the company has issued and that a shareholder has bought.

Patent

An exclusive right granted by the federal government to exclude others from making, using, or selling for a fixed period of time an invention, design, or process.

Portfolio

A collection of companies invested in by an angel or VC

Social Venture

A company established to create societal benefit through entrepreneurial methods

Soft Landing

A face-saving purchase of a failed startup, usually with little or no compensation

Waterfall

The order in which creditors get their money out on an exit (and everyone else). It's "last in, first out" almost always.