Master the Essential Startup Terms for Success
Your startup's ultimate sidekick.
Navigating the startup ecosystem requires familiarity with a unique set of terms and jargon. Our comprehensive startup glossary is designed to equip entrepreneurs, investors, and enthusiasts with clear definitions of essential concepts, facilitating effective communication and informed decision-making.
A
Accelerator – A time‐limited program that provides funding, mentorship, and resources to startups.
Angel Investor – A high–net‐worth individual who invests early in startups in exchange for equity.
Acquisition – The process of one company buying or merging with another.
Anti-Dilution – Provisions that protect an investor’s ownership percentage when new shares are issued at a lower price.
Advisory Board – A group of experts who guide a startup without formal management roles.
Angel Investor – A high–net‐worth individual who invests early in startups in exchange for equity.
Acquisition – The process of one company buying or merging with another.
Anti-Dilution – Provisions that protect an investor’s ownership percentage when new shares are issued at a lower price.
Advisory Board – A group of experts who guide a startup without formal management roles.
B
Bootstrapping – Funding a startup’s growth using personal savings or revenue, not outside capital.
Burn Rate – The speed at which a startup spends its cash reserves before reaching profitability.
Board (of Directors) – Group elected to oversee strategic and operational decisions.
Bridge Financing – Short-term funding used to “bridge” a startup to its next round of financing.
Benchmark – Standard performance metrics used to measure progress and compare results.
Burn Rate – The speed at which a startup spends its cash reserves before reaching profitability.
Board (of Directors) – Group elected to oversee strategic and operational decisions.
Bridge Financing – Short-term funding used to “bridge” a startup to its next round of financing.
Benchmark – Standard performance metrics used to measure progress and compare results.
C
Convertible Note – A debt instrument that converts into equity at a future financing round.
Cap Table – A spreadsheet showing the company’s equity ownership and dilution across rounds.
Crowdfunding – Raising capital from many small contributions, typically via online platforms.
Carry (Carried Interest) – The share of profits that VC fund managers earn once investors are repaid.
Customer Acquisition Cost (CAC) – The cost to acquire a new customer, a key metric for growth.
Cap Table – A spreadsheet showing the company’s equity ownership and dilution across rounds.
Crowdfunding – Raising capital from many small contributions, typically via online platforms.
Carry (Carried Interest) – The share of profits that VC fund managers earn once investors are repaid.
Customer Acquisition Cost (CAC) – The cost to acquire a new customer, a key metric for growth.
D
Dilution – Reduction in existing shareholders’ ownership percentages when new shares are issued.
Down Round – A financing round where the company’s valuation is lower than in previous rounds.
Due Diligence – The process of thoroughly investigating a startup before making an investment.
Drag-Along Rights – Clauses that allow majority shareholders to force minority shareholders to join in a sale.
Deal Flow – The rate at which investment opportunities come to a VC or investor.
Down Round – A financing round where the company’s valuation is lower than in previous rounds.
Due Diligence – The process of thoroughly investigating a startup before making an investment.
Drag-Along Rights – Clauses that allow majority shareholders to force minority shareholders to join in a sale.
Deal Flow – The rate at which investment opportunities come to a VC or investor.
E
Exit Strategy – The plan for how investors and founders will eventually realize returns (e.g., IPO)
Equity – Ownership in a company, typically represented by shares.
ESOP – Employee Stock Option Pool; shares set aside to incentivize employees.
Early-Stage Funding – Investments made when a startup is still in its initial development phase.
EBITDA – Earnings before interest, taxes, depreciation, and amortization; a measure of operational performance.
Equity – Ownership in a company, typically represented by shares.
ESOP – Employee Stock Option Pool; shares set aside to incentivize employees.
Early-Stage Funding – Investments made when a startup is still in its initial development phase.
EBITDA – Earnings before interest, taxes, depreciation, and amortization; a measure of operational performance.
F
Follow-on Investment – Additional funding provided in later rounds to support growth.
Fundraising Round – A distinct stage (e.g., Seed, Series A) when a startup raises capital.
Fund of Funds (FoF) – An investment vehicle that allocates capital into several venture funds.
Founder – One or more individuals who start the company and drive its early vision.
Full Ratchet – An anti-dilution mechanism that adjusts conversion prices to the lowest subsequent round price.
Fundraising Round – A distinct stage (e.g., Seed, Series A) when a startup raises capital.
Fund of Funds (FoF) – An investment vehicle that allocates capital into several venture funds.
Founder – One or more individuals who start the company and drive its early vision.
Full Ratchet – An anti-dilution mechanism that adjusts conversion prices to the lowest subsequent round price.
G
Growth Hacking – Creative, low–cost strategies to rapidly grow a startup’s user base.
Gross Margin – Revenue minus cost of goods sold, reflecting operational efficiency.
General Partner (GP) – The VC firm’s decision–makers who manage investments.
Growth Equity – Capital provided to mature companies to accelerate expansion without full control.
Guerrilla Marketing – Unconventional, low–budget marketing tactics used to create buzz.
Gross Margin – Revenue minus cost of goods sold, reflecting operational efficiency.
General Partner (GP) – The VC firm’s decision–makers who manage investments.
Growth Equity – Capital provided to mature companies to accelerate expansion without full control.
Guerrilla Marketing – Unconventional, low–budget marketing tactics used to create buzz.
H
Hustle – The relentless energy drive that founders and startups embody to overcome challenges.
Hackathon – An event where teams rapidly prototype solutions, often sparking innovative ideas.
Hypergrowth – Extremely rapid business growth, a key goal for many startups and VC portfolios.
Hurdle Rate – The minimum acceptable return on an investment, used to screen opportunities.
High-Impact – Describes initiatives that significantly influence growth or market position.
Hackathon – An event where teams rapidly prototype solutions, often sparking innovative ideas.
Hypergrowth – Extremely rapid business growth, a key goal for many startups and VC portfolios.
Hurdle Rate – The minimum acceptable return on an investment, used to screen opportunities.
High-Impact – Describes initiatives that significantly influence growth or market position.
I
Incubator – A program that nurtures early-stage startups with resources and office space before they’re ready to scale.
Investor – An individual or firm that provides capital to startups expecting future returns.
Ideation – The creative process of generating and refining a business idea.
IPO (Initial Public Offering) – Process by which a private company goes public by issuing shares to the public.
Investment Thesis – A clear rationale outlining why a startup is a promising investment opportunity.
Investor – An individual or firm that provides capital to startups expecting future returns.
Ideation – The creative process of generating and refining a business idea.
IPO (Initial Public Offering) – Process by which a private company goes public by issuing shares to the public.
Investment Thesis – A clear rationale outlining why a startup is a promising investment opportunity.
J
J Curve – A graph that shows negative early returns turning into rapid growth over time.
Joint Venture – A strategic partnership where two or more parties collaborate on a business project.
Job-to-be-Done – A framework for understanding customer needs by focusing on the underlying problem to solve.
Jumpstart – The initial boost (often financial or strategic) that propels a startup forward.
Jolt – A sudden infusion of energy or capital that accelerates growth (often used informally).
Joint Venture – A strategic partnership where two or more parties collaborate on a business project.
Job-to-be-Done – A framework for understanding customer needs by focusing on the underlying problem to solve.
Jumpstart – The initial boost (often financial or strategic) that propels a startup forward.
Jolt – A sudden infusion of energy or capital that accelerates growth (often used informally).
K
KPI (Key Performance Indicator) – Metrics that measure a startup’s performance against objectives.
Key Person Clause – Contractual term that protects investors if executive leaves the company.
KISS (Keep It Simple Security) – A financing document designed for simplicity and speed.
Kickstarter – Both a popular crowdfunding platform and a model for early-stage funding via public support.
Knowledge Capital – Collective expertise and intellectual resources that drive innovation in startup.
Key Person Clause – Contractual term that protects investors if executive leaves the company.
KISS (Keep It Simple Security) – A financing document designed for simplicity and speed.
Kickstarter – Both a popular crowdfunding platform and a model for early-stage funding via public support.
Knowledge Capital – Collective expertise and intellectual resources that drive innovation in startup.
L
Liquidation Preference – A provision that ensures preferred investors are paid before common shareholders in a sale or liquidation.
Limited Partner (LP) – An investor in a VC fund who provides capital but has limited management involvement.
Lean Startup – A methodology emphasizing rapid iteration, validated learning, and minimal waste.
Liquidity Event – A transaction (such as an acquisition) that enables investors to cash out their equity.
Launch – The public debut of a startup’s product or service.
Limited Partner (LP) – An investor in a VC fund who provides capital but has limited management involvement.
Lean Startup – A methodology emphasizing rapid iteration, validated learning, and minimal waste.
Liquidity Event – A transaction (such as an acquisition) that enables investors to cash out their equity.
Launch – The public debut of a startup’s product or service.
M
MVP (Minimum Viable Product) – The simplest version of a product that can be released to test market assumptions.
Market Validation – Evidence that a product or service meets a market need, often gathered from early customers.
Monetization – The process of turning a product, service, or user base into revenue.
Milestones – Key performance or development targets that a startup aims to achieve over time.
Management Team – The group of founders and executives responsible for leading and operating the startup.
Market Validation – Evidence that a product or service meets a market need, often gathered from early customers.
Monetization – The process of turning a product, service, or user base into revenue.
Milestones – Key performance or development targets that a startup aims to achieve over time.
Management Team – The group of founders and executives responsible for leading and operating the startup.
N
NDA (Non-Disclosure Agreement) – Contract to protect confidential information between parties.
Non-Dilutive Funding – Capital raised without sacrificing equity, often through grants or revenue-based financing.
Niche – A specialized segment of the market where a startup can focus its efforts.
New Market – Emerging or untapped segment where a startup can innovate and capture demand.
Networking – Building relationships and connections that can lead to funding, partnerships, or mentorship.
Non-Dilutive Funding – Capital raised without sacrificing equity, often through grants or revenue-based financing.
Niche – A specialized segment of the market where a startup can focus its efforts.
New Market – Emerging or untapped segment where a startup can innovate and capture demand.
Networking – Building relationships and connections that can lead to funding, partnerships, or mentorship.
O
Option Pool – Shares for future issuance to employees, advisors, and founders as incentives.
IPO (Initial Public Offering) – Process of private company offering shares to public for the first time.
Organic Growth – Expansion through increasing sales and customers without external funding.
Ownership – The equity stake held by founders, employees, and investors in a company.
Outsourcing – Contracting external parties to handle business processes.
IPO (Initial Public Offering) – Process of private company offering shares to public for the first time.
Organic Growth – Expansion through increasing sales and customers without external funding.
Ownership – The equity stake held by founders, employees, and investors in a company.
Outsourcing – Contracting external parties to handle business processes.
P
Pitch Deck – Presentation of a startup’s vision, strategy, and financials to potential investors.
Pivot – Change in a startup’s business model or product direction in response to market feedback.
Pre-Money Valuation – The valuation of a company before new capital is injected.
Post-Money Valuation – The valuation of a company after financing, including the new investment.
Pro Rata Rights – The right for existing investors to participate in future funding rounds to maintain their ownership percentage.
Pivot – Change in a startup’s business model or product direction in response to market feedback.
Pre-Money Valuation – The valuation of a company before new capital is injected.
Post-Money Valuation – The valuation of a company after financing, including the new investment.
Pro Rata Rights – The right for existing investors to participate in future funding rounds to maintain their ownership percentage.
Q
Qualified Financing – A funding round that meets predefined conditions triggering conversion rights (often in convertible note deals).
Quantitative Analysis – The systematic examination of numerical data (e.g., metrics and KPIs) to assess a startup’s performance.
Quick Scaling – Rapid expansion in users, revenue, or market presence that is often a key VC focus.
Quality Due Diligence – A thorough evaluation process focusing on the quantitative and qualitative aspects of a startup.
Quota – Allocation or cap on capital an investor or fund is willing to commit to a startup.
Quantitative Analysis – The systematic examination of numerical data (e.g., metrics and KPIs) to assess a startup’s performance.
Quick Scaling – Rapid expansion in users, revenue, or market presence that is often a key VC focus.
Quality Due Diligence – A thorough evaluation process focusing on the quantitative and qualitative aspects of a startup.
Quota – Allocation or cap on capital an investor or fund is willing to commit to a startup.
R
Runway – Amount of time a startup can operate before it runs out of cash given its current burn rate.
ROI (Return on Investment) – A measure of the profitability of an investment relative to its cost.
Round (Funding Round) – A distinct phase of fundraising (e.g., Seed, Series A) in a startup’s lifecycle.
Risk Tolerance – The level of uncertainty an investor is willing to accept in pursuit of potential returns.
Recapitalization – Restructuring a company’s capital structure, often to improve financial stability or prepare for growth.
ROI (Return on Investment) – A measure of the profitability of an investment relative to its cost.
Round (Funding Round) – A distinct phase of fundraising (e.g., Seed, Series A) in a startup’s lifecycle.
Risk Tolerance – The level of uncertainty an investor is willing to accept in pursuit of potential returns.
Recapitalization – Restructuring a company’s capital structure, often to improve financial stability or prepare for growth.
S
Seed Funding – Earliest round of financing to support initial product development and market entry.
Series A/B/C – Sequential rounds of institutional financing that fuel growth at various stages of a startup’s development.
Scalability – Potential for startup to grow its revenue rapidly without an increase in costs.
Syndicate – Investors who pool their resources to invest in a startup, sharing both risk and reward.
Strategic Partnership – Collaborations that combine resources or expertise to accelerate growth or expand market reach.
Series A/B/C – Sequential rounds of institutional financing that fuel growth at various stages of a startup’s development.
Scalability – Potential for startup to grow its revenue rapidly without an increase in costs.
Syndicate – Investors who pool their resources to invest in a startup, sharing both risk and reward.
Strategic Partnership – Collaborations that combine resources or expertise to accelerate growth or expand market reach.
T
Term Sheet – A non-binding document outlining the key terms and conditions of an investment deal.
Traction – A startup’s progress in the market, often shown by user growth, revenue, or other KPIs.
Tech Startup – A company that leverages technology as a core part of its business model, often characterized by rapid innovation.
Tipping Point – The critical moment when a startup’s growth accelerates rapidly, often attracting significant investor interest.
TAM (Total Addressable Market) – The overall revenue opportunity available if a startup captured 100% of its target market.
Traction – A startup’s progress in the market, often shown by user growth, revenue, or other KPIs.
Tech Startup – A company that leverages technology as a core part of its business model, often characterized by rapid innovation.
Tipping Point – The critical moment when a startup’s growth accelerates rapidly, often attracting significant investor interest.
TAM (Total Addressable Market) – The overall revenue opportunity available if a startup captured 100% of its target market.
U
Unicorn – A privately held startup valued at over US $1 billion.
User Acquisition – Process of attracting and converting new users or customers.
Unit Economics – The direct revenues and costs associated with a single unit of a product or service, used to assess profitability.
Upside Potential – Maximum expected gain from an investment, reflecting growth possibilities.
Unique Value Proposition – A clear statement that explains how a startup’s product or service uniquely solves customer problems.
User Acquisition – Process of attracting and converting new users or customers.
Unit Economics – The direct revenues and costs associated with a single unit of a product or service, used to assess profitability.
Upside Potential – Maximum expected gain from an investment, reflecting growth possibilities.
Unique Value Proposition – A clear statement that explains how a startup’s product or service uniquely solves customer problems.
V
Venture Capital – Investment in early-stage companies with high growth potential, typically in exchange for equity.
Valuation – The process of determining the current worth of a startup, used during fundraising.
VC Fund – A pooled investment vehicle managed by a venture capital firm to invest in startups.
Vesting – The process by which employees earn the right to their stock options or equity over time.
Viral Growth – Rapid, exponential growth often driven by word-of-mouth and network effects.
Valuation – The process of determining the current worth of a startup, used during fundraising.
VC Fund – A pooled investment vehicle managed by a venture capital firm to invest in startups.
Vesting – The process by which employees earn the right to their stock options or equity over time.
Viral Growth – Rapid, exponential growth often driven by word-of-mouth and network effects.
W
Warrant – A financial instrument giving the holder the right to purchase stock at a specific price within a set period.
Waterfall – Structure that outlines the order in which returns are paid to investors after exit.
Working Capital – The funds available to a startup for day-to-day operations.
Weighted Average Anti-Dilution – A protection mechanism that adjusts the conversion price based on the weighted average of new and existing share prices.
Warm Intro – An introduction to potential investors or partners made through a trusted intermediary.
Waterfall – Structure that outlines the order in which returns are paid to investors after exit.
Working Capital – The funds available to a startup for day-to-day operations.
Weighted Average Anti-Dilution – A protection mechanism that adjusts the conversion price based on the weighted average of new and existing share prices.
Warm Intro – An introduction to potential investors or partners made through a trusted intermediary.
X
XaaS (Anything as a Service) – A business model in which various services (software, infrastructure, etc.) are provided on a subscription basis.
XIRR – Metric to calculate the annualized internal rate of return for a series of irregular cash flows.
X-Factor – The unique quality or competitive edge that differentiates a startup from its peers.
X-Growth – Informal shorthand for exponential or “x-times” growth, indicating rapid scaling.
X-Scale – Refers to the capacity of a startup to grow or scale significantly, often used in discussions of market potential.
XIRR – Metric to calculate the annualized internal rate of return for a series of irregular cash flows.
X-Factor – The unique quality or competitive edge that differentiates a startup from its peers.
X-Growth – Informal shorthand for exponential or “x-times” growth, indicating rapid scaling.
X-Scale – Refers to the capacity of a startup to grow or scale significantly, often used in discussions of market potential.
Y
Y Combinator – One of the most well-known startup accelerators that has launched companies like Airbnb and Dropbox.
YOY (Year-over-Year) Growth – A metric that compares performance from one year to the next.
Yield – The return generated on an investment, often expressed as a percentage.
Young Founders – Entrepreneurs who are driving startup innovation.
Yearly Run Rate – A projection of a startup’s annual revenue based on its current performance.
YOY (Year-over-Year) Growth – A metric that compares performance from one year to the next.
Yield – The return generated on an investment, often expressed as a percentage.
Young Founders – Entrepreneurs who are driving startup innovation.
Yearly Run Rate – A projection of a startup’s annual revenue based on its current performance.
Z
Zero to One – A concept (popularized by Peter Thiel) describing the creation of something entirely new rather than incremental improvements.
Zebra – A term used to describe startups that focus on sustainability and profitability rather than high, speculative valuations (in contrast to unicorns).
Zenith – The peak or highest point of growth and success for a startup.
Zeal – The passionate enthusiasm and energy founders often bring to drive their company’s vision.
Zillion – Informal slang for a very large, almost unquantifiable number, often used to describe ambitious market projections.
Zebra – A term used to describe startups that focus on sustainability and profitability rather than high, speculative valuations (in contrast to unicorns).
Zenith – The peak or highest point of growth and success for a startup.
Zeal – The passionate enthusiasm and energy founders often bring to drive their company’s vision.
Zillion – Informal slang for a very large, almost unquantifiable number, often used to describe ambitious market projections.