30 Jargon You Need to Know to Work in the Startup Ecosystem
Entering the world of startups is exciting but can also feel overwhelming at times. One early difficulty for many people is understanding the complicated network of special words and short forms used in this industry. So, to close this knowledge gap, we made a comprehensive guide about startup jargon. It is for professionals new to the field and also for those who want to update what they already know.Â
What is a Startup?
A startup is a young company distinguished by its innovative approach that aims to introduce a new, disruptive product or service into the market, strategically filling a gap and meeting specific demand. These businesses stand out because they use new methods and grow quickly in size, usually by using advanced technology. Additionally, in contrast to small businesses that concentrate on gradual growth, startups flourish amid much uncertainty and chase after substantial profits.Â
Also, their organizational environment encourages taking chances, being quick to adapt, and practicing a streamlined business method. If you are new to the ecosystem, it is essential to know the common startup jargon used by such firms because it helps in talking to others and fitting into the startup world. There is constantly some new knowledge to be gained and ideas to learn from as one traverses the path that a new company takes as it journeys through the various stages of funding. Knowing the language, therefore, is an invaluable asset.
What is Startup Jargon?Â
The startup community uses specialized language, which is referred to as startup jargon. It includes terms, short forms of words, and expressions that entrepreneurs, investors, and other stakeholders in this world understand well. Furthermore, knowing such jargon is very important for effective communication.Â
Why Does Jargon Exist?Â
Every sector has its own special language, and the world of new startups is no different. This language acts like a shortcut that lets people who work in this area talk to each other more effectively. Equally important, though, is that it helps condense complex ideas and processes into easily understandable terms, thus fostering a sense of community among insiders.
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Top 30 Startup Jargon to Know to Work in the Startup Ecosystem
1. Bootstrapping
Funding the startup through personal finances or the operating revenues of the new company, and avoiding external investment.
2. Burn Rate
The rate at which a company is spending its capital before achieving positive cash flow.
3. Cap Table
This table provides an analysis of the founders’ and investors’ percentage of ownership, equity dilution, and equity value in each round of investment.
4. Churn Rate
The rate at which customers stop doing business with a company is indicative of customer retention and satisfaction.
5. Convertible Note
This refers to short-term debt that converts into equity, typically in conjunction with a future financing round.
6. Disrupt
Creating a new market and value network that eventually disrupts an existing market, thus displacing established market-leading firms.
7. Due Diligence
An investigation or exercise of care that a business or individual is expected to take before entering into an agreement or contract with another party.
8. Elevator Pitch
A succinct and persuasive sales pitch to spark interest in what the startup offers.
9. Exit Strategy
The planned approach to exiting a business. This could include selling the company, merging it with another company, or going public.
10. Growth Hacking
Strategies focused solely on growth are typically used by startups to rapidly grow their business in the early stages.
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11. Lean Startup
A methodology for developing businesses and products that aim to shorten product development cycles by adopting a combination of business-hypothesis-driven experimentation, iterative product releases, and validated learning.
12. Minimum Viable Product (MVP)
The version of a new product that allows a team to collect the maximum amount of validated learning about customers with the least effort.
13. Pivot
This is a structured course adjustment designed to test a new fundamental hypothesis about the product, strategy, and growth engine.
14. Runway
The amount of time until a startup goes out of business, assuming current income and expenses stay constant.
15. Seed Capital
The initial funding used to begin creating a business or a new product is intended to support the business until it can generate cash on its own or until it is ready for further investments.
16. Series A/B/C Funding
Rounds of financing for a startup company after the initial seed stage. Each round provides a progressive level of investment and valuation based on achievements and future potential.
17. Stealth Mode
A company’s temporary state of secretiveness is often to avoid alerting potential competitors about a product or service in development.
18. Unicorn
A startup company with a value of over $1 billion.
19. Value Proposition
A statement that explains how a product solves customers’ problems or improves their situation delivers specific benefits and provides reasons why consumers should buy from this company and not from the competition.
20. Venture Capital
Financial capital provided to early-stage, high-potential, high-risk startup companies.
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21. Angel Investor
An affluent individual who provides capital for a startup, usually in exchange for convertible debt or ownership equity.
22. B2B & B2C
Business-to-Business and Business-to-Consumer, respectively, are terms that indicate the target audience for sales.
23. Crowdfunding
Raising small amounts of money from a large number of people, typically via the Internet, to fund a new business venture.
24. Equity
Ownership interest in a company, usually in the form of stock or stock options.
25. Intellectual Property (IP)
Legal rights that result from intellectual activity in the industrial, scientific, literary, and creative fields.
26. Market Penetration
The action or process of a product entering the market and gaining a share of an existing market.
27. Non-Disclosure Agreement (NDA)
A legal contract between at least two parties that outlines confidential material, knowledge, or information that the parties wish to share with one another for certain purposes but wish to restrict access to.
28. Proof of Concept (POC)
Evidence, typically deriving from an experiment or pilot project, which demonstrates that a design concept, business proposal, etc., is feasible.
29. Scaling
The process of adjusting or adapting the business model to support an increase in sales, work, or output in a cost-effective and efficient manner.
30. Traction
The progress of a startup company and the momentum it gains as it grows are indicators of customer demand.
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The abovementioned startup jargon is more than just industry lingo; it is, in fact, the key to unlocking meaningful conversations and opportunities in the startup ecosystem. Therefore, we encourage you to dive deeper into learning these terms and applying them in your entrepreneurial journey. As you become more fluent in startup jargon, you will find navigating this landscape to be a more rewarding and less daunting experience.
However, do remember that immersing yourself in the startup ecosystem is a continuous learning journey. Familiarizing yourself with startup jargon is just one step on this path. To further your understanding and skills in entrepreneurship, consider enrolling in Emeritus’ entrepreneurship courses. These courses are designed to provide you with the knowledge and tools needed to thrive in the startup world, thus making them a valuable addition to your learning path.
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