Chances are you might have seen these terms when you read articles about startup companies. In the list below, not all of these words are necessarily new, it’s just that not everyone is familiar with these jargon which are mostly used in the startup industry.
Therefore, here we have listed out 18 most common jargon in the startup world. Have any to add? List them in the comments as well to help newbies familiarise with the terms!
A startup is a company working to solve a problem where the solution is not obvious and success is not guaranteed.
A startup is a temporary organisation used to search for a repeatable and scalable business model.
Source: Steve Blank
2. Co-working Space
The use of an office or other working environment by people who are self-employed or working for different employers, typically so as to share equipment, ideas, and knowledge.
Source: Oxford Dictionary
Scaling refers to the period in a startup’s life when management and board feels like they can systematically accelerate growth with confidence that the resources they put in will yield great and measurable results.
Source: Venture Capatalist Fred Destin in the scaling up Quora thread.
For profit programs that accept open-applications to join classes (known as ‘cohorts’) of startups consisting of small founding teams with externally developed ideas. The accelerator provide support through small amounts of seed capital, mentoring, training and events for a finite period—usually 3 to 4 months—in exchange for single-digit chunks of equity.
The startups ‘graduate’ at the end of the program at which point they are geared to gaining full-blown investment, with each program culminating in a focal ‘demo day’ for investors.
An incubation program is usually longer duration and provides resources (shared office space, etc.) and hand-holding and guidance through the first year or so of a venture’s launch into the market.
Source: Founder of The Hub for Startups, Prajakt Raut in Quora
6. Venture Capital (VC)
Money provided by investors to startup firms as well as small businesses with perceived long-term growth potential. The source of funding is considered very important for startups that have no access to capital markets. It typically entails high risk for the investor, but it has the potential for above-average returns.
7. Angel Investor
They are the people who invest in early stage or startup companies in exchange for an equity ownership interest. Angel investing in startups has been accelerating. Compared to Venture Capitalists, angel investors tend to invest fewer dollars, although some form angel groups to invest in larger business opportunities.
Unicorn is a term that was recently introduced in the venture capital industry. The term denotes startup companies that have soared to $1 billion valuation or higher.
The reason behind the naming is because the billion-dollar startup was once considered a myth but now they seem to be everywhere. Some of the examples of startup companies in Asia which valued over $1 billion including Xiaomi, GrabTaxi, Lazada, and Zomato.
Source: Banque du Liban Accelerate
While a ‘unicorn’ denotes an unlisted company that has achieved a valuation of over $1 billion based on funds raised, a ‘dragon’ is one that raises $1 billion from investors in a single round.
Boostrapping, also known as self-funding. Basically the term means starting a business with no money, or at least, very little money. Such startups fund the development of their company without the help of venture capital firms or angel investment. Therefore they tend to be very cautious with their expenses and they might not be proﬁtable at ﬁrst.
Source: Small Bitz Trends
11. Pre-seed Investment
Pre-seed Investment is defined as the first investment the startup receives, generally it is done by an angel investor, but can also be done by incubators and accelerators.
Source: Venture One
12. Seed Round
Seed Round is the first round of venture capital funding for a business venture. This is for the development stage, just past the angel round, and can be up to $1 million of capital. Subsequent rounds are referred to in terms of Series (Series A, B, C, D, E) or stages (startup stage, formative stage, mezzanine stage).
Source: The News Savvy
When your first business model is not working (and this happens more often than not), the CEO and team pivot to plan B. However pivoting doesn’t necessarily mean desperation. It can be a tool to discover additional growth—growth you might otherwise have overlooked.
14. Growth Hacking
One whose passion and focus is pushing a metric through use of a testable and scalable methodology. Basically it is a process of searching for the right trick or ‘hack’ that allows for accelerated and accumulative growth.
Disrupt means to change a long established industry in a way that industry incumbents or other tech startups have overlooked. For instance, Spotify set out to disrupt the way we listen to music. Instead of paying for songs and keeping them forever, like on iTunes, you can stream millions of songs for free on Spotify.
Source: Startup Defination
16. Startup Metrics
Metrics are important to report the progress of a startup and provide key insights into the business that would make the difference between success and failure.
Metrics are also used to demonstrate traction to your startup, some people call this key metric a key performance indicator, or KPI. Usually, there is a financial component to this key metric.
Source: Sophos Law Firm
17. Minimum Viable Product (MVP)
MVP is one of the most important lean startup techniques. The basic idea is to maximise validated learning for the least amount of effort. After all, why waste effort building out a product without first testing if it’s worth it.
Source: Lean Stack
18. Exit Strategy
The company brings in money and the investors get money out. So startups looking for angel investors or venture capital (VC) absolutely need an exit strategy because either you want to see your company get acquired, merge with another company, go public or liquidate the business completely.
The method by which a venture capitalist or business owner intends to get out of an investment that he or she has made in the past. In other words, the exit strategy is a way of “cashing out” an investment.