Accelerator
a short-term program that provides small businesses with guidance, coaching, and resources to help them grow
Acqui-hiring
when a larger, more successful company buys out a smaller, failing company to gain its talented workforce, not its product or services
Angel investor / Business angel
an individual who gives money to a startup company in its initial stage in exchange for a stake in the business
Bootstrapping
when entrepreneurs fund their startup(s) with their own personal savings and use money from friends and family
Bridge loan / Swing loan
a short-term loan (i.e., two weeks to three years) provided by investors to help entrepreneurs make ends meet until more money is secured or until the next round of funding
Burn rate / Run rate
the amount of money an entrepreneur spends over a set period compared to the startup’s available capital
Churn rate
the number of customers that stop doing business with a company over a set period compared to the organization’s total clientele
Cliff
the time (e.g., a year) required before employees are able to fully claim their stake or shares in the company they work for
Cottage business/industry
a startup that functions best on a small scale and has little potential for large growth
Disruptive technology
programs, tools, or products that significantly alter the way the public does something, transforming the marketplace in turn
Exit strategy
the plan startup founders have to eventually transfer ownership of their company so that they can make money and pay back their investors
Freemium
a popular startup business model in which customers are provided with a free restricted version of the company’s products or services, yet clients are charged for advanced features
Growth hacking
a marketing strategy that employs low-cost, non-traditional methods to grow a business quickly
Hockey stick
the shape of a curve on a line chart that shows stagnancy then a dramatic upward turn, indicating exponential growth in sales or customers for a startup
Incubator
a long-term program that mentors and offers resources to startups–specifically in the initial stage of their journey–to help them grow, often in exchange for an equity stake in the business
IPO (initial public offering) / “Go public”
the event in which a startup offers shares of its private business to the public for purchase, changing it to a public company
Iteration
the repetitive process of trying out a product or service, identifying its flaws, improving it accordingly, and testing it again–all with the goal of achieving a better result each time
Launch
to start a business by officially putting its products or services on the market
Lean startup
an approach aimed at building, testing, and improving a business concept (e.g., product, service) cheaply and quickly
Merger
the combination and blending of two separate enterprises to form a new single business
MVP (minimum viable product)
the most basic and inexpensive version of a startup’s new product, highlighting its principal features, which is released to consumers for testing
Pitch deck
a short, informative, engaging presentation used to share the fundamental aspects of a business with investors to convince them that it is a company worth investing in
Pivot
when a startup makes a quick, dramatic shift in its business approach, product, service, or target market
Pre-money valuation
an estimate of what a startup is worth before receiving any funding from outside investments
Post-money valuation
an estimate of what a startup is worth after receiving one round of funding from outside investments in addition to the pre-money valuation
ROI (return on investment)
a performance measure of how profitable an investment is compared to its cost
Runway
the estimated length of time a startup can continue operating before using up all its funding
Scalable
being able to grow substantially and consistently due to high market demand and the capacity to expand into additional markets
Seed funding / Seed round / Seed stage
the very first period of raising capital for a new startup–whether through cash or equity–from family, friends, investors, venture capitalists, banks, etc.
Sweat equity
shares of a new startup given to employees in exchange for the work they do, specifically when there isn’t enough funding to pay workers with cash
Term sheet / Letter of intent
a (typically non-binding) document outlining the basic terms and conditions of a potential investment
Unicorn
a private startup that is valued at over $1 billion
Venture capital
financing provided to new startups with large growth potential by investors in exchange for equity or shares in the company
Value proposition / Value prop
the unique features of your business, products, or services that attract investors and customers to your company