ACCELERATOR
Something to do with speeding down
the highway? Not quite. An accelerator is an organisation or program that
offers advice, mentor ship and resources to help small businesses grow.
ANGEL INVESTMENT
This type of investment typically
happens when a startup is in its early stages; it’s when an investor, or a
‘business angel,; provides startups with initial or growth capital for a stake
in the company. Having invested in big names like Google and uber, CEO of
Amazon Jeff Bezos in one of the most well known angel investor.
BOOTSTRAP
Ever heard the phrase pulling oneself up by ones’s bootstraps? Well,
this has evolved from it and it means to self-fund using personal resources,
like friends and family, to get cash going.
BRIDGE LOAN
A loan taken out for a short-term
period, typically between two weeks and three years, until long-term financing
can be arranged. Also known as a swing loan.
BURN RATE
Quite literally, how fast you are
spending your money. Alternatively referred to as a run rate, don’t be
surprised if you hear this term being tossed around at industry networking
events.
EXIT
Founders sometimes develop an exit
business strategy before or during their entrepreneurial journey. An exit is a
way to transition the ownership of your company to another company and pay back
your investors.
INCUBATOR
An incubator differs from an
accelerator in that it supports startups in their early development stages. It’s
essentially an organisation that nurtures young firms during their first few
months or years, usually in exchange for equity.
IPO (INITIAL PUBLIC OFFERING)
When a startup’s shares of stock are
made public for the first time, it’s called an IPO. At this point, a private
organisation turns into a public company.
LEAN STARTUP
A method used to validate a business
concept quickly and cheaply when founding a new company or introducing a new
product.
MVP (MINIMUM VIABLE PRODUCT)
a technique which involves the
development of a basic version of a new product that aims to satisfy its early
adopters. The product is then a developed with further features only after
considering feedback from initial users.
PITCH DECK
if you have ever had to pitch an
idea to your boss before, you probably tried your best to be convincing. Similarly, a pitch deck is a short version of a business plan which presents key
figures to potential investors in hopes of winning them over.
PIVOT
Much like its meaning when used to
describe a mechanism turning on a central point, the term pivot in the startup
world occurs when a company quickly changes directions after previously
targeting a different market segment.
SCALE UP
You can say you have scaled up when
your company has grown in terms of size, geographical location, market and
other relevant factors. The noun scale up refers to a company that has already
validated its product in a market and is economically sustainable.
SEED FUNDING
The first round of small,
early-stage investment from family members, friends, banks or an investor is
commonly referred to as seed funding.
STARTUP
Though there’s no universal
definition of a startup, one that’s generally accepted is that it’s a company
in the early or growth stages of operation, usually under three years old and (if
not already) becoming profitable.
TERM SHEET/LETTER OF INTENT
The document between an investor and
a startup including the basic terms and conditions for financing which is
commonly nonbinding. Once an agreement is reached between the parties involved,
a binding agreement based on the term sheet is drawn up.
UNICORN
A company often in the tech or
software sector worth over US$1 billion. Some well known unicorn startup
companies include Tesla, AirBnB, Instagram and Shopify.
VC (VENTURE CAPITAL/VENTURE CAPITALIST)
Venture capital is financing
provided by firms to small, high-risk, startup companies with large growth
potential in return for equity. Investors working for venture capital firms
that choose to invest in specific companies are typically called VCs.
VESTING
A process that involves giving or
earning a right to a present or future payment, benefit or asset. ...and while
words like ninja or guru may or not be considered jargon, since they’re
increasingly being added to job titles at startups (Community Ninja, Sales Guru,
etc.), we’ve added them here for good measure.
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