Startup Terminologies You Should Know
The startup economy has created a number of new terms for entrepreneurs. This article will help you to understand the language of the new age business environment.
- Seed Funding – It is the initial funding given to any startup to start or accelerate the business operations.
- Angel Investor – Individual who provides a small amount of capital or funding to a startup for a stake / share in the company.
- Venture Capital – Funding by a venture capital firm to an startup
- Venture Capitalist or VC – An individual investor, working for a venture capital firm, that chooses to invest in specific companies
- Incubator – An organization that helps develop startups usually in exchange for equity / stake in the company
- Stake – It is the pie or portion or share of a company
- Liquidation – The process of dissolving a company by selling off all of its assets
- Portfolio Company – A company that a specific Venture Capital firm or a Venture Capitalist (VC) has invested in is considered a “portfolio company” of that firm or VC
- Round – Depending upon the stage or phase of the company, investors fund an startup. Initial funding is called as seed funding followed by Series A, B, and C rounds if necessary. In rare cases rounds can go as far as Series F
- Disruption – It is the terms used when a new technology challenges & replace an old technology.
- Bootstrapped – A company is bootstrapped when it is funded by an entrepreneur’s personal resources or the company’s own revenue i.e. without the use of outside funding or capital.
- Acqui-hired – buy out of a company primarily for the skills and expertise of its staff, rather than for its products or services.
- Hackathon – an event, in which a large number of people meet to engage in collaborative computer programming to develop assigned product.
- Crowdsource – obtain (information or input into a particular task or project) by enlisting the services of a number of people, either paid or unpaid, typically via the Internet.
- Burn Rate – Amount of cash used each month typically for working capital & other expenses.
- Deck: A slide-based presentation that can be transferred digitally. Typically associated with investment pitch presentations.
- Pivot: A course correction for startups based on findings in user testing and analysis.
