Startup

An accelerator is a program in which veteran entrepreneurs guide startup founders through the early stages of founding a company. In exchange, the accelerator receives a portion of the company’s equity.

An accredited investor is an individual who is allowed to invest in unregulated securities, such as private equity. An accredited investor is determined by his or her annual income and/or net worth.

Analytics refers to the process of identifying trends in data. Companies use analytics to make insightful decisions regarding a product, resources, forecasting, or financials.

Annual contract value (ACV) is a metric that shows the average amount of money your company earns per contract in a year. It is calculated by dividing the total contract value by the total number of contracted years.

Annual recurring revenue (ARR) is a metric that sums up a company’s subscription-based revenue for a given year. It is calculated by taking the total annual revenue and subtracting non-recurring revenue from it.

BANT is short for budget, authority, need, and timeline. In practice, the BANT framework helps sales teams to better qualify their leads by checking that the lead is both able and willing to purchase their product.

Beta testing is when you release an early version of a product to a select number of users. The goal is to identify bugs or areas for improvement prior to releasing the final product to the general public.

Bootstrapping is when an entrepreneur doesn’t raise outside capital to start his or her business. Instead, the entrepreneur uses his or her own means to fund the operations of the business.

In software development, a bug refers to an error within the app or platform. It is, in other words, a coding error that needs to be addressed.

A burn rate is a measurement of how much cash a company is losing in a given period of time. Burn rate is especially important to companies that are not profitable and rely on external sources of cash.

B2B is a business model in which a company’s primary customer is another company. For example, an airplane manufacturer sells its planes to a commercial airline.

B2C is a business model in which the company’s primary customer is an individual user. For example, a grocery store sells its goods to everyday customers.

C-Suite refers to the highest-ranking managers of a company. Examples of c-suite titles include Chief Executive Officer (CEO), Chief Financial Officer (CFO), Chief Operating Officer (COO), and Chief Marketing Officer (CMO).

Cash flow positive is when a company is earning more money than it is spending or losing it in a given time. It is not to be confused with profitability, which is related but not the same.

In SaaS, churn refers to the proportion of customers that canceled their subscriptions. A simple formula for calculating churn is by dividing the total number of people who canceled by the total customers at the start of the period.

A cohort is a group of customers that share a common interest, behavior, or other trait. Companies can perform a cohort analysis to identify which cohorts generate more revenue or which ones tend to churn (as examples).

Crowdfunding is when you raise funds for your business or project by asking a large number of individuals to donate money. Crowdfunding is often facilitated through a third-party platform.

The customer satisfaction (CSAT) score is used to measure how happy customers are with a product, service, or the overall company. CSAT is measured through customer ratings and surveys.

Customer success refers to a company’s effort to ensure that its customers are satisfied with their product or service. Companies often have a dedicated customer success team.

A demo refers to a stage in the sales cycle when the company gives a prospective customer(s) a walkthrough of the product. The demo is meant to show a product’s full capabilities, as it relates to the prospect’s interests and needs.

DevOps is a shorthand for software development and operations. It refers to the methodologies used to optimize the development process so that the company can build and improve products faster than its competitors.

An early adopter refers to the first set of users who try a new product (usually technology) before it becomes mainstream.

The end user refers to the intended user of a product. As an example, the end user of a bookkeeping software is a member of the finance team at a company.

An exit strategy refers to a founder’s plan for how and when to sell the company. It could involve an acquisition, IPO, or other event.

In SaaS, a feature request refers to a suggestion for how to improve or grow the software platform. Feature requests can be made by customers, employees, prospects, or other stakeholders.

First-mover advantage (FMA) refers to a situation in which a company is one of the first companies to operate in a new market and therefore has a leg up over its competition.

In SaaS, freemium is a popular business model in which a software platform is available to use for free. However, users must pay a premium to access additional or advanced features.

Gamify is a strategy in which a company incorporates game mechanics (such as a point-scoring system or badges) into a product or marketing campaign to boost engagement.

Growth hacking is considered a type of marketing in which you use the resources at your disposal to rapidly grow and retain customers. It relies on frequent experimentation and data analysis.

An iterative process is an approach used by developers, designers, and other professionals that involves continually testing, optimizing, and improving a product. It allows you to attack a problem incrementally.

Low-hanging fruit refers to tasks or goals that can be achieved with little (or relatively less) effort. Companies, for instance, many choose to tackle low-hanging fruit before investing in high-effort projects.

A merger is when two or more companies are combined to form a single company. Oftentimes, mergers happen because there are financial and/or operational synergies between the two companies.

A minimum viable product (MVP) is a product that only possesses the core functionalities to be considered usable. Companies offer MVPs to start generating revenue and collect feedback from early users.

A monthly recurring revenue (MRR) is a metric that sums up a company’s subscription-based revenue in a given month. MRR is typically calculated by multiplying the total number of users by the average monthly revenue per user (ARPU).

In SaaS, onboarding refers to the process of helping a new customer get set up and navigate your product. The onboarding process begins after the sales team has officially closed the sale.

A pitch deck is a presentation that’s often given by a founder to investors during fundraising. A pitch deck includes a short explanation of the company’s goal, differentiators, and plan.

Product adoption generally refers to when the market starts to use and enjoy your product. As an example, Facebook was a novel platform in the early 2000s and took years to achieve product adoption.

A product roadmap is a visual roadmap of all the planned stages of building a product. It helps everyone on a team stay aligned on the timeline, progress, resource allocation, and more of the project.

A quarterly business review (QBR) is when a freelancer or company connects with their customers on a quarterly basis. The meeting is intended to gauge satisfaction and identify additional needs of the customer.

In SaaS, a renewal refers to when a customer chooses to continue using a product after his or her contract has ended. In other words, the user decides to renew his or her platform subscription.

In SaaS, retention is a metric that shows how many customers continue to use a product over time. Retention compares the total number of paying customers at the start of the period with the number of paying customers at the end of the period.

A return on investment (ROI) captures how much money a person or company has earned or lost from the cash they’ve put into a product, marketing campaign, or other expense.

Runway refers to the amount of time a company has left before its cash balance goes to zero. Runway is typically used by startups that rely on external sources of cash to finance the business.

Seed funding refers to the very first stage of funding that a business pursues. This precedes Series A, B, C, etc. However, startups do not always raise more rounds after receiving seed money.

Series A, B, C, etc. is the naming convention for the funding rounds that a business may pursue. Each round is an additional effort to raise money for the growing business.

A software as a service (SaaS) is when a business sells subscriptions to a platform and the customer pays in recurring periods. As an example, a customer subscribing to Netflix and paying on a monthly basis.

Sweat equity refers to the amount of time and effort that someone (often a startup founder or employees) puts into a project or company. These individuals are usually compensated via sweat equity shares.

A term sheet is an offer letter presented to a company by a lead investor stating the terms of the financing round. The terms often include the amount that will be raised, the valuation, and share preferences.

A unicorn refers to a startup that has achieved a valuation of $1 billion or more. The term originated in venture capitalism to describe a rare situation in which a startup grows to be this big, but unicorns have become more common in recent times.

User experience (UX) is related to UI, but specifically refers to how enjoyable and memorable a user’s interaction with a system is. Good UX design relies on a deep understanding of user behaviors and preferences.

User interface (UI) refers to the screens and elements that a user interacts with on a website, app, or other device. An optimal UI is one that’s easy to use and easy to navigate.

Valuation is an estimation of how much a company is worth. Valuations are based on various factors and can differ from appraiser to appraiser, similar to public stocks, in which each investor values the company differently.

A venture capitalist (VC) is an investor that specifically provides capital for startups and small businesses. VCs receive equity stake in return for their support.