101 Startup Buzzwords for Entrepreneurs to Know
Here is our list of 101 startup buzzwords that every entrepreneur should know:
An accelerator, or startup accelerator, is an organization that provides support to startups and early-stage companies to help them grow their businesses. They are designed to accelerate or “scale up” a company’s growth. Accelerators typically operate on cohort based programs which include educational, networking, and mentoring opportunities and access to resources.
An acquisition is when an individual or company purchases a majority of another company’s shares or assets. Acquisitions may occur with or without the other company’s consent. They are commonplace in business, and acquisition is a common goal for many startups.
Agile refers to a group of modern software development methodologies that focus on collaboration, iteration, and delivering work in small, manageable batches. The implementation of agile methodologies draw their strength from efficient, face-to-face communication and a short feedback loop. The most popular agile methodologies include Scrum, Kanban, and Lean.
In the software development cycle, an alpha release is a very early release of a piece of software or an update. Alpha releases are used for the first testing of the software, and they are often incomplete and may not yet include all of the features that will be included in the final software.
Angel investments are simply investments in your business, in exchange for equity or convertible debt, by individuals with the money to invest. Angel investors invest in seed, startup, and early-stage companies, typically focusing on those with significant growth potential.
Articles of Incorporation
The Articles of Incorporation are a set of documents that establish the existence of a corporation. The articles are filed with the Secretary of State or a similar agency that handles business filings in your state of formation. The articles become public record and are designed to provide important information about your corporation, including its name, address, contact information, and details about its stock.
Authorized shares are the maximum number of shares of stock that the company is authorized to issue. Companies determine their own number of authorized shares, and this is defined within their articles of incorporation.
Business-to-business (B2B) refers to business models or transactions focused on the exchange of goods and services between two or more businesses.
In the software development cycle, a beta release is an early release of a piece of software or an update. Beta releases usually include all of the features that will be included in the final software but have not been fully tested for bugs or errors.
Big data refers to the analysis of large, complex data sets for diagnostic, predictive, and prescriptive insights. The field of big data works to capture, analyze, and understand data that cannot be analyzed through traditional methods. Big data is used across various applications, including product development, predicting consumer behavior and trends, and organizational decision-making.
Board of Directors
A board of directors, sometimes referred to as a B of D, is a group of people who are responsible for setting organizational policy and oversight of an organization — which may include for-profit, nonprofit, and government entities. In corporations, the board of directors is elected by the shareholders of the organization; however, in privately held companies, family firms, and private businesses, a B of D may be self-appointed.
Bootstrapping refers to utilizing the resources of the founder or co-founders to start lean with no outside help. Bootstrapping relies on using personal funds, resources you already have access to, and the revenue from early sales to build and grow a business.
The burn rate is the rate at which a company spends money in excess of its revenues – the rate at which it is losing money. Burn rates are typically expressed in $/month (i.e., “a burn rate of $45,000/month”). Burn rates are common in the technology space, especially in seed, startup, and early-stage or pre-revenue companies.
Business Model Canvas
The business model canvas is a business planning and strategic management template used to plan, develop, and communicate a business idea. The business model canvas was developed by Alex Osterwalder in his book Business Model Generation, and it is often used to document and innovate with business models.
Business capital refers to money — specifically, the money a business has on hand to cover its day-to-day expenses. Types of capital include working capital, debt capital, equity capital, and specialty (or trading) capital.
A co-founder is a person who starts a business with another person. Each owner/founder of a business would be considered a co-founder. Co-founders may be involved in the startup from conception or may be brought on during the early or transition stages of a startup.
Common stock refers to one of two primary types of shares of ownership (stock) in a corporation. Shareholders who hold shares of common stock are afforded voting rights in the company and may or may not receive dividends. See Preferred Stock for more information on stock terms.
A corporation is an organization that is recognized as a separate legal entity that is distinct from its owners. Corporations offer liability protection for owners, a simplified transfer of ownership, and greater appeal for investors. The most common types of corporations include C corporation, S corporation, B corporation, and nonprofit corporation. The process of forming a corporation differs by the type of corporation and the state in which the organization will be incorporated.
Crowdfunding is raising money for a project or new venture from a large number of people (the crowd). Crowdfunding has become an increasingly popular way of raising startup capital, allowing entrepreneurs to bypass traditional sources of funding and go straight to their users, supporters, and fans to raise money for projects and new ventures.
Customer Acquisition Cost
Customer acquisition cost (CAC) refers to the average cost to convince a new lead, customer, or user to buy or use your product or service. Customer acquisition cost can be estimated by dividing all of the costs associated with acquiring a new customer (marketing, advertising, sales, etc.) by the number of new customers acquired during a specific period.
DBA stands for "doing business as." A DBA is any registered name a business operates under that isn't its legal name. DBAs are sometimes referred to as a trade name, assumed name, or fictitious name. In most states, you are required to file a DBA and register any name your company is using besides the name that was listed when the business was formed.
Disruption, or disruptive innovation, is the process through which a product or service enters the market and eventually replaces and displaces industry giants. True innovative disruption occurs along one of two types of markets: low-end markets and new-markets before moving up the market and overtaking or displacing industry leaders.
Due diligence is an inspection or review of the details and facts relevant to a specific transaction. In the startup world, due diligence involves examining the financial records and is often conducted in relation to business valuation, buying and selling a business, and when investing or taking on investors.
Early adopters are the people and businesses who begin using a new product or technology before nearly everyone else. Early adopters often pay a premium to be the first one’s to use a new innovation and are often influential in the innovation process as they provide valuable input and feedback.
An elevator pitch is a short (i.e., 30 to 90 second) speech describing a product, service, company, or business idea. The goal of an elevator pitch is to raise interest in your idea or in what your organization does.
An entrepreneur is a person who recognizes an opportunity to create value through the introduction of new goods and services, business models, processes. They organize, start, and grow a company to pursue those opportunities, often at considerable risk, in the hope for profits.
Equity is the true value of the shares or ownership of a company. This is the value that the shareholders or the owners of a company would expect to receive if the company’s assets were sold and its debts and liabilities satisfied. Equity is represented in the accounting equation:
Assets = Liabilities + Equity.
Equity financing (or equity funding) is raising capital through the sale of shares or ownership in a company. Equity financing may include financing from angel investments, venture capital, equity-based crowdfunding, corporate investments, and IPOs and the issuance of shares in the company.
A business exit, or exit strategy, refers to the business owner's plan to exit the business and sell or transfer ownership to other individuals, investors, or another company. The most common exit strategies include: sale of the company, liquidation, mergers, liquidations, and IPO.
A founder is a person who comes up with a startup idea and launches a business in order to pursue the opportunity they identified. Founders may start businesses on their own or alongside others. Also see Co-founder.
Friends and Family Round
A family and friends round is typically the first round of venture financing in which an entrepreneur solicits family and friends that know and have trust in her or him to invest in their venture in order to raise seed and startup capital.
Funding is one of the first things you need to think about when launching a startup. Startup funding comes in many different forms, including grants, loans, lines of credit, angel investments, venture capital, and more. Each type of funding suits different startups depending on their industry, the number of costs, and who you, the entrepreneur, are.
A general partnership, or simply partnership, is a business owned by more than one individual that isn't formally organized. A general partnership files taxes under the partners' names, and the partners are liable for any actions taken against the business.
Small business grants are free money (i.e., they do not have to be repaid) provided by federal and state governments, nonprofit organizations, and some corporations for a specific purpose or to a specific demographic to start a business. For example, there are a number of small business grants explicitly for women, minorities, veterans, immigrants, and even felons to start businesses.
Growth hacking is a term used in digital marketing for the process and strategies associated with acquiring as many early customers or users as possible while spending as little as they can. As its name implies, growth hacking is focused solely on growth as opposed to revenue or profit. The three main types of growth hacking strategies include content marketing, product marketing, and advertising.
An incubator, or startup incubator, is an organization that provides support to startups to help them develop their business idea. They are designed to incubate or “nurture” a startup’s idea, prototyping, and development. Incubators typically provide educational programs, networking opportunities, and mentoring along with access to office space and additional resources.
Initial Public Offering (IPO)
An initial public offering, or IPO, is the first issuance of a company’s stock to the public. This may include institutional and/or retail investors on over the counter (OTC) and stock exchange markets. IPOs are typically underwritten by investment banks, which then facilitate the sale of shares on one or more exchanges.
Intellectual Property (IP)
Intellectual property, or IP, refers to the knowledge assets of the organization. Creations of the human mind, these are the non-physical assets of an individual or organization. The four most common types of intellectual property include copyrights, trademarks, trade secrets, and patents.
Internet of Things
The internet of things (IoT) refers to the network of interconnected physical devices that have been designed and build with smart technology — sensors, software, and other technologies — that allow them to collect information, transfer data along the network, and communicate amongst themselves and with users.While every device that is connected to the internet is really a part of the internet of things, it is most often used to refer to more specific networked applications such as smart homes, smart manufacturing, and wireless inventory control.
An intrapreneur is an employee inside a company who acts as an entrepreneur in recognizing and organizing company resources around pursuing an opportunity to create value through the introduction of new goods and services, business models, processes, and markets.
An investor is any individual, company, or fund that provides capital to an organization in exchange for a share of ownership in the corporation with the expectation of future financial profit and rewards.
Iterating refers to a part of the process of the product development cycle where a business improves upon and redefines its product, service, or brand to better meet customer’s wants and needs. Iterations are often minor but focus on making improvements and adding features that customers value.
A joint venture is a business agreement between two or more parties to combine their knowledge and resources to complete a particular project or task. Joint ventures are typically characterized by shared ownership and shared risks and returns on a specific project.
Key Performance Indicator (KPI)
Key performance indicators (KPIs) are the measurements and metrics used to assess performance and progress toward an intended goal. Examples of key performance indicators include revenue, profit, cost, COGS, number of customers, number of users, customer retention, customer satisfaction, and the list could go on and on. The primary focus of KPIs should be those that are most important for the individual business to meet its goals.
A startup launch is the process of taking a startup idea from a simple idea to market. A successful startup launch occurs when the product or service is made available for use or sale to customers or users.
The Lean Startup is a startup methodology that uses an unconventional, cyclical approach to develop products and test the viability of business models. The five principles of lean startup methodology give entrepreneurs pillars of support to rapidly develop their product through validated learning and, in turn, create a sustainable startup model.
Lifetime value (LTV), or customer lifetime value (CLV), is a metric estimating how much money a customer will spend with your company over their lifetime. Simply put, LTV is a measure of how much a customer is worth to your business. Customer lifetime value can be calculated by multiplying the average customer order by the frequency of orders and the average customer lifetime.
Limited Liability Company (LLC)
A limited liability company (LLC) is a type of US business structure that can be used to form a separate legal entity from the owner(s) of a company to protect an owner’s personal liability and assets from the liabilities of the venture. Forming an LLC is simple, and LLCs offer the pass-through taxation of sole proprietorships and partnerships while affording the liability protection of corporations.
Liquidity refers to the availability of liquid assets (those that can be converted to cash) and the ease of which they can be converted. The easier an asset is to convert to cash, the more liquid that asset is. A higher overall liquidity means that an organization has more assets available to pay liabilities, pay debts, and fund growth.
A business loan is a form of debt financing used by companies to fund startup expenses, invest in research and development, resolve cash flow problems, leverage growth opportunities, and more. There are many different types of small business loans. The most popular include SBA loans, working capital loans, term loans, factoring loans, and microloans.
Market research is the collection, analysis, and interpretation of data related to your target market and target customer to support strategic decision making. There are two different types of market research: secondary market research and primary market research.
Minimum Viable Product (MVP)
A minimum viable product (or MVP) is a first/early version of a product that has been designed with the fewest number of features to still be usable. MVPs are used to test early versions of products with users, gather feedback, validate the idea, and improve the product. The purpose of the MVP approach is to collect feedback early and often, designing products and services with the features that customers want.
A mission statement is a short statement that explains your company's goals in terms of what you do for your customers. A good mission statement should tell your reader what your company does, who you do it for, and why you do what you do.
Net revenue is a company’s revenue after accounting for returns and adjustments along with all expenses, including cost of goods sold, operating expenses, interest, depreciation and amortization, and taxes. This is the company’s bottom line at the end of the day.
Networking is the process of meeting other people, forming relationships, and building and growing your entrepreneurial network. An entrepreneur’s network is a crucial source of resources — including knowledge, advice, and connections to the networks of others.
Open source, or open source software (OSS), refers to computer software for which the code is freely available and that anyone can view, modify, upgrade, or distribute it if they wish.
Pain points are specific problems that each of your customers or prospective customers are experiencing that would make them want or need your product or service.
See General Partnership.
A patent is a license or title that gives its owners exclusive rights to produce, use, or sell a design, process, or invention for a specific amount of time. There are three different types of patents issued by the US Patent and Trademark Office — the utility patent, design patent, and plant patent.
A pitch deck, or investor deck, is the visual presentation (think PowerPoint or Prezi) that accompanies a business pitch designed to provide potential investors more information about your business and move toward soliciting their investment.
A pivot is when a company shifts its business model or strategies to adapt to feedback or to changes in customer preferences, technology, the industry or sector, or any other number of factors that prompt a startup to change its game plan.
A business’s portfolio, or product portfolio, is the entire assortment of products and services offered by a company. A business’s portfolio may consist of a single product or service, or it may consist of multiple product and/or services lines.
Preferred stock refers to one of two primary types of shares of ownership (stock) in a corporation. Shareholders who hold shares of preferred stock are not afforded voting rights in the company, but they receive dividends before holders of common stock. Also see Common Stock.
Primary Market Research
Primary market research is the collection of new information to gain a further understanding of the problem at hand. Primary market research involves you collecting the data or hiring a market research firm to collect data for you. This is you going out and actually collecting the opinions of your potential customers.
A private company is a company that is controlled under private ownership. These can include sole proprietorships, LLCs, S corporations, and C corporations. Private companies may issue stock and have shareholders, but they are not traded on the public market.
Profit is the amount of income generated from a business after accounting for all expenses, including operating expenses, non-operating expenses, and taxes.
Proof of Concept
Proof of concept, also known as proof of principle, is a short experiment or exercise to test the feasibility of an idea with the goal of demonstrating that an idea — product, service, design, business model — is realistic.
A public company, or publicly traded company, is a company whose ownership is distributed via shares of stock that are traded on the public market — including stock exchanges or over-the-counter markets.
Quality assurance is the process of confirming and providing confidence that the quality of a business’s products and services is being met to the company’s and customer’s standards. Quality assurance practices may include audits, sampling, benchmarking, cost-benefit analysis, and quality management methodologies (e.g., Six Sigma, Kaizen, Toyota Production System, Zero Defect Programs, etc.).
Return on Investment (ROI)
Return on investment (ROI) is a metric used to measure the financial returns on an investment. ROI is the ratio between the net income from the investment and the amount of the investment. To calculate the ROI, the net income from the investment is divided by the amount invested.
Revenue is the total income (i.e., sales, rent, interest income) that a company generates over a specific period of time. The three types of revenue that a company may have include operating revenue, non operating revenue, and other income.
SaaS refers to software-as-a-service. This is the process of licensing and selling software via a subscription model. SaaS is usually delivered through the internet — as a service — as opposed to purchasing a piece of software and installing it on a computer or other device.
Scalability refers to the ability to change (grow) in size and scale. In startups, startup scalability describes the ability to grow without being stifled by its business model, structure, available market, or resources.
Search Engine Optimization (SEO)
Search engine optimization (SEO) is the process of optimizing web pages to improve web traffic (both quantity and quality) to a website through search. SEO is implemented by designing your site and content to rank higher in search engine results. This is accomplished through page design, internal and external links, keywords, and creating quality and relevant content.
Secondary Market Research
Secondary market research is the collection, analysis, and interpretation of data that has already been collected for other purposes. Secondary market research may include the collection of data from a number of sources such as the US Census Bureau, consumer agencies, and for-profit organizations.
Seed funding is the first round of equity funding for a startup. Seed funding is often used to finance research, develop a product or service, and launch a venture. The most common sources for seed funding include friends and family, crowdfunding, and angel investments.
Self-funding a business means that the business owners/founders provide the initial funds to start a business through their own personal resources — personal funds, credit cards, and personal loans. Self-funding is the most common and earliest type of funding for most startups.
A serial entrepreneur is someone who starts and runs numerous businesses across their career. Some serial entrepreneurs will launch, grow, and sell one business at a time, while others may launch and grow several businesses at the same time.
Series A, B, C
Series funding refers to the round of venture capital investment in a startup.
- Series A funding is the first round of funding a venture receives from venture capital. This round of funding is usually sought once a startup has an MVP and is typically used to finance further development and launch.
- Series B funding is the second round of funding. Series B funding is usually sought only once a product or service is being sold on the market and is typically used to finance further growth.
- Series C funding is the third round of funding. Series C funding is usually sought once a company has proven to be successful and is typically used to finance further expansion, growth, or acquisitions.
A shareholder, or stockholder, is an individual or organization that owns at least one share of stock in a private or public corporation.
The sharing economy refers to a part of the economic system built around sharing resources. It is based on peer-to-peer transactions and includes real sharing (think Open Source and Wikipedia) and pseudo-sharing where there may be profit motives (think Airbnb and Uber).
A side hustle, or side gig, is a way of making money outside of one’s main or full-time work. In the startup world, a number of successful companies started as side hustles, including Apple, HubSpot, Groupon, Etsy, and Instagram.
A social entrepreneur is a person who starts an organization with the goal of solving social, cultural, or environmental issues or with a goal of advancing social change. Social entrepreneurs are driven to serve the greater good and are dedicated to making a positive impact on the world around them. The three types of ventures launched by social entrepreneurs include nonprofits, hybrid nonprofits, and social business ventures.
A sole proprietorship is an informal business structure owned by a single individual that is not legally separated from its owner. Sole proprietors are personally liable for any debts incurred by the business, including debts incurred as a result of a lawsuit.
A startup is a new or young business designed for high growth. Not all new businesses are startups. Startup companies have business models that support innovation. They tend to focus on innovative and unique products and services and are highly concentrated in the technology and online spaces.
Stealth mode refers to a state of secrecy where a startup or organization goes out of its way to stay under the radar and out of the public eye. This is often done to protect information from competitors until an official release or product launch.
Sweat equity refers to the value, or increase in value, attributed to the unpaid labor that the owners or shareholders of a company contribute to their startup or organization.
A SWOT analysis is an analysis of your company's strengths, weaknesses, opportunities, and threats by assessing factors both inside and outside your venture. The SWOT analysis can help you understand your industry, your market, your venture, and the strategies that you should pursue.
A target market is the specific group of potential customers to whom a product or service is intended. And, no, it is not everyone. A company’s target market is consumers likely to purchase their product or service. A product or service’s most likely customers often share similar characteristics — demographics, geography, personality, and behavior. Identifying the proper target market is key to a company’s success.
A technology stack, or tech stack, is the catalog or index of all of the technological solutions that went into creating and running a web or mobile application or software. These include all of the languages, databases, servers, and software that make up the underlying elements of the application or software.
A term sheet is a document that defines the terms and conditions of a potential business deal or investment. Term sheets are non-binding but lay out the basic conditions of the deal and represent the basis for further negotiation.
A thought leader is a person or organization that is seen as an expert on a particular subject and is influential in contributing to the knowledge in and direction of their domain (i.e., technology, field, industry, sector).
Traction, in the business world, means that a startup is making progress and building momentum. There is no measure for traction; rather, there is evidence for it. Depending on the type of business and industry, traction may be demonstrated through pre-orders, the number of users, the number of customers, the amount of user or customer engagement, or a number of other metrics. Investors want to see clear traction — this shows that the startup is going somewhere.
A trademark is a type of intellectual property (IP) composed of a design, insignia, logo, phrase, or word that identifies your products, services, or brand. In the US, trademarks are registered with the Patent and Trademark Office (USPTO) and are protected from unauthorized use by other individuals or organizations.
In the startup world, a unicorn is a privately held company valued at over $1 billion USD. Across the world there are more than 600 unicorn companies as of May 2021. This in addition to the more than 100 former unicorns that have gone public (issued an IPO) or been acquired. Well-known former unicorns include Airbnb, Alibaba, DoorDash, Facebook, Google, and Uber.
User Experience (UX)
User experience (UX) refers to how a user interacts with a product, service, software, or application and the user’s feelings (e.g., emotions, perceptions, preferences, etc.) when they are interacting with it. The user experience includes all aspects of the user’s interactions with an organization, including perceptions of usefulness, ease of use, accessibility, credibility, and efficiency.
Valuation refers to the process of assessing the appropriate monetary value or worth of something. In assessing the value of a business, there are four primary types of valuation methods: asset-based, revenue-based, market-based, and seller’s discretionary earnings valuations. Not all valuation methods are right for every type of business. The type of valuation you use will depend on the purpose of the valuation along with the size and legal structure of the business.
Venture Capital (VC)
Venture capital (VC) is a type of private equity in which venture capitalists (both individuals and firms) provide seed, startup, and early-stage capital to ventures with high-growth potential.
Vesting is the process of earning or accruing an asset over or after a specific period of time. In the case of startups, founders or employees may be granted shares in the company (ownership) in the startup upon the initial issuance of stock or upon hire. However, these shares may be subject to a vesting period in which if the founder or employee leaves the company the shares (or a portion of the shares) would be forfeited back to the company. The typical vesting period for a startup is four years.
A vision statement is a simple 5 to 10-word sentence or tagline that expresses the fundamental goals of your firm. Good vision statements reflect your company’s long-term passion and purpose, often in a way that evokes emotion.
A wholesaler is an individual or a company that purchases bulk goods from producers and then turns around and resells these goods in smaller lots to individual retailers. Wholesalers serve as a major distribution arm for many producers and act as middlemen between producers and retailers.
A wireframe is an outline, or blueprint, of a website or application used by project managers, designers, and developers to plan and develop the website or software. Wireframes are usually first drafted in the early stages of development and focus on the structure, layout, features, and functionality of the site or software.