Startup Lingo: A Glossary of 65 Business Terms You Need To Succeed

A natural person with income exceeding $200,000 in each of the two most recent years or joint income with spouse exceeding $300,000 for those years and a reasonable expectation of the same income level in the current year; or a natural person who has an individual net worth, or joint net worth with the person’s spouse, that exceeds $1 million at the time of the purchase, excluding the value of the primary residence of such person.

 In layman’s terms, it is a rich individual potentially interested in investing in your company.

One of the most common expressions in the startup world. A lot of people will quote “the Three Fs”: Friends, Family and Fools. These channels are often where you get your first cash to get things going. If you are using very little capital and proving your hypothesis, you are successfully bootstrapping.

B2B means you offering a “Business To Business” product or service to other companies.

B2C means you offer your products or services to other consumers (Business To Consumer).

A bubble describes a moment in an economic cycle where an industry or company does not realize that it might be overvalued and over-inflated. When a “tech bubble” bursts, it means that a lot of startups go bust and investors lose their money.

Burn rate describes how fast you go through your cash. The majority of startups lose before they break even and then make a profit.

Cash flow positive is accountant speak meaning that more money is coming in than going out. When you deduct your expenses from your earnings, you have a positive amount in your bank account. Staying in the black, especially when you are self-funded is the name of the game!

The churn rate is the annual percentage rate at which customers stop subscribing to a service or employees leave a job.

A cliff usually applies to vesting schedules (shares given to employees over time). Cliffs can be a device for the CEO to fire employees or let them leave without giving them stock within a limited period of time (usually 1 year). There are horror stories from Silicon Valley about early employees being cut just before they get to receive their equity stake. Cliffs are also used on CEOs by investors to make sure the CEO sticks around after getting the cash.

Usually used in the creative industry, copyrights protect your music, art and film. It allows the creator to have exclusive rights for its use and distribution.

A cottage business is one that is never going to make millions or scale but can be a nice lifestyle business.

Crowdfunding is the act of using a site like Kickstarter to get a tribe of early fans together to give you money to help you get your product/site launched. It is sometimes confused with Crowdsourcing, which is about getting information for free from people on the internet or using a survey.

A deck is a presentation that covers all aspects of your business in a succinct and exciting way. If you ever need inspiration for a good deck, check out how Elon Musk uses his to demonstrate the TESLA Powerwall.

A digital nomad is typically a web or app developer who travels the world while coding. There are forecasted to be $1 billion digital nomads by 2035.

Demographic is an expression that is frequently used in marketing to describe the age, gender, income, schooling and occupation of your ideal customers.

Disruptive technology is any tech that takes an industry, forces consumers to think differently and then adopt that technology as the new norm. Examples include Uber, Lyft, Airbnb and JetSmarter.

Early adopters are the first users of your product. They will typically be key influencers and active on social media. They will give you your most honest and sometimes overly direct feedback. If you can identify these people effectively and have them interacting with your startup from an early stage, you can get lots of free exposure.

As with an ecosystem in nature, a startup ecosystem has its food chain. There are the hunters, the herd and the bottom feeders. Work out where you are and where you want to be then get involved in your startup ecosystem. If they city you are in doesn’t have incubators, accelerators, co-working spaces, mentors and investors, you should a). move to another city, or b). start your own ecosystem.

Equity crowdfunding is just like regular crowdfunding but instead of getting money in return for a fee, you pay a fee to the crowdfunding site and a % of the company to investors.

An evangelist is someone inside your organization who is your number one fan. They love your company so much that they often go above and beyond their expected role to help promote your company. If you find an evangelist, hire them!

An Exit strategy is how you plan to sell your company to give you and your investors a return on their investment. This ranges depending on the industry but a standard multiple with technology investments seems to be 10x.

The first to market is not always the first to capitalize on the industry. One reason for this is that it can cost a fortune to educate potential users or customers. That said, if you are a company like Disney, you lead and by innovating you stay ahead of the pack. This is called first mover advantage.

A freemium approach is when give your basic product away for free and then try to upsell other features to your customers. It is a common and proven technique to acquire more users.

If you gamify something, you add a game layer to your product that encourages people to use it with rewards of various kinds. See Foursquare and how they used virtual badges and the “Mayor” badge to encourage people to use their app.

Growth Hacking was a term first used by Sean Ellis (Dropbox) to describe a marketing technique that focuses on quickly finding scalable growth through non-traditional and inexpensive tactics such as the use of social media. Other companies that have effectively used this technique are Airbnb and Foundr.

Hacking is using your computer science degree and your entrepreneurial flare to create disruptive technology. Look out for “hacker houses” and “hackathons” if you want to join the tech community.

Hockey stick is an expression used by investors to describe the shape of the growth curve they want to see in businesses they invest in. They want to see their startups grow quickly and at least double sales every year.

Intellectual property as a whole covers patents, trademarks and copyrights. It is a good way to protect your “secret sauce”.

Intellectual property— the DNA of your product. They are typically used to protect your design.

Trademarks — they are used to protect your brand and depending on which one you register, you can add a “™ “ or “®” (Registered Trademark) next to your logo.

Copyright — they are used to protect your creative content (like film, music or art) and it allows you to use a “©” symbol on your content.