Whether you’re a founder, investor, or startup enthusiast, the startup world can be complex. This glossary helps you quickly understand key terms, concepts, and metrics: from funding rounds and financials to growth strategies and go-to-market plans, providing clear, concise explanations to make learning and decision-making easier.
| Accelerator | A structured program that provides startups with mentorship, education, and funding, often ending in a Demo Day. |
| Actionable Metric | Data that can be used to inform decisions and improve performance. |
| Angel Investor | A high-net-worth individual who provides capital to startups in exchange for equity, often at an early stage. |
| Annual Recurring Revenue (ARR) | The predictable and recurring revenue generated by subscriptions over a one-year period. |
| Board of Directors | The governing body overseeing a company’s strategy and protecting shareholder interests. |
| Bootstrapping | Building and growing a company using personal savings and revenues instead of external funding. |
| Bottom-up Forecast | A realistic financial projection built from detailed, operational data such as customer counts or pricing. |
| Break-Even Point | The point where total revenue equals total costs (no profit, no loss). |
| Bridge Financing | Short-term funding used between larger rounds to maintain cash flow. |
| Burn Rate | The rate at which a startup spends its available cash to cover operating expenses before generating positive cash flow. |
| Business Model | The structure showing how a company creates, delivers, and captures value. |
| Business Plan | A document describing how a company will reach its goals. |
| Business to Business (B2B) | A business that sells products/service to other businesses |
| Business to Consumer (B2C) | A business that sells products/services to individuals |
| Cap Table (Capitalization Table) | A detailed breakdown of a company's ownership structure: who holds equity, what types and in what proportions in a table/spreadsheet. |
| Churn Rate | The percentage of customers who stop using a product or service during a given time period. |
| Convertible Equity | An investment that converts to equity in a future round, often used before valuation is set. |
| Convertible Note | A loan that converts into equity in a future funding round, often with a discount or valuation cap. |
| Cost of Goods Sold (COGS) | The direct costs of producing a company’s products or services. |
| Cost of Revenue (COR) | The total cost required to generate revenue, including COGS and CAC. |
| Critical Path | The sequence of essential tasks that determine the minimum time needed to achieve project goals. |
| Customer Acquisition Cost (CAC) | The total cost of acquiring a new customer, including marketing and sales expenses. |
| Customer Lifetime Value (CLTV) | The total expected revenue generated from a single customer over their lifetime. |
| Customer Relationship Management (CRM) | Practices and strategies to analyse and improve relationships with customers. |
| Due Diligence | The process of investigating a company’s financial, legal, and operational details before an investment or acquisition. |
| Dilution | The reduction in ownership percentage of existing shareholders due to the issuance of new shares. |
| Drag-Along Rights | Rights that allow majority shareholders to force minority shareholders to join in the sale of a company. |
| Equity | Ownership stake in a company, usually represented as shares. |
| Employee Stock Ownership Plan (ESOP) | A plan incentivising employees with stocks (shares) in the company. |
| Environmental, Social, Governance (ESG) | Criteria for evaluating a company’s sustainability practices and ethical impact. |
| Execution Plan | A timeline and strategy for achieving milestones and deploying resources effectively. |
Exit Strategy | A planned approach for founders and investors to realize a return on their investment by selling, merging, or otherwise transferring ownership of the company. |
| Financial Model | A structured forecast of a company’s financial performance based on assumptions and key metrics. A comprehensive plan for how a startup will reach customers, position its product, and achieve competitive advantage. |
| Founders’ Agreement | A contract among founders detailing roles, responsibilities, and equity. |
| Freemium Model | A business model offering basic services for free while charging for premium features. |
| Funding Round | A stage in raising capital, e.g., Seed, Series A, B, C. |
| Gap Analysis | Assessment comparing current performance with desired goals to identify gaps and improvement areas. |
| Go-to-Market Strategy (GTM) | A comprehensive plan for how a startup will reach customers, position its product, and achieve competitive advantage. |
| Governance | The system of rules, practices, and processes by which a company is directed and controlled. |
| Gross Margin | The percentage of revenue remaining after subtracting cost of goods sold (COGS). |
| Gross Revenue | Total revenue before any deductions like expenses or taxes. |
| Growth Stage | The phase of a startup where revenue and customer base are scaling rapidly. |
| Growth Strategy | The plan describing how a business will expand its customer base and revenue over time. |
| Ideal Customer Profile (ICP) | The description of the type of customer most likely to benefit from and purchase the product. |
| Incubator | An organization that helps early-stage startups grow by offering mentoring, resources, and sometimes office space. |
| Intellectual Property (IP) | Creations of the mind such as inventions, designs, and brand names, protected by law through patents, trademarks, or copyrights. |
| Initial Public Offering (IPO) | The first sale of a company’s shares to the public on a stock exchange. |
| Incubation Period | Early stage of a startup when ideas are nurtured before full launch. |
| Intangible Assets | Non-physical assets such as patents, trademarks, brand value, or goodwill. |
| Income Statement | A financial statement showing revenue, expenses, and profit over a period. |
| Kickstarter Campaign | A crowdfunding project to raise money for a product or idea. |
| Key Accounts | Major customers that are strategically important to a business. |
| Key Performance Indicators (KPI) | A measurable value that indicates how effectively a company is achieving business objectives. |
| Knowledge Management | Strategies and tools to capture, store, and share knowledge within an organization. |
| Lead Generation | Efforts to attract potential customers and develop a sales pipeline. |
| Lead Time | The time between the design of a product and its production, or between ordering a product and receiving it. |
| Lifetime Value (LTV) | The total revenue a company can expect from a single customer over the duration of their relationship. |
| Liquidity | The availability of liquid assets that allow a business to meet short-term obligations. |
| Lobbying | Activities aimed at influencing political decisions in favor of a company or industry. |
| Market Assessment | Analysis of potential market size, customer segments, and growth opportunities. |
| Market Penetration | A measure or strategy showing the extent to which a product is recognized and bought by customers in a particular market. |
| Minimum Viable Product (MVP) | The simplest version of a product that can be released to test assumptions and gather user feedback. |
| Moats | Competitive advantages that protect a business from competitors, such as patents or trade secrets. |
| Monetisation Model | Strategy for businesses to generate revenue from its products or services. |
| Net Cash Flow | Net amount of cash moving into and out of a business. Can be positive or negative. |
| Network Effects | The phenomenon where a product becomes more valuable as more people use it. |
| Net Profit | The company’s total earnings after all expenses, taxes, and costs have been deducted. |
| Net Revenue | Revenue remaining after returns, allowances, and discounts are subtracted. |
| Next Round Financing | The subsequent funding round after the current one, e.g., Series B following Series A. |
| Niche Market | A specific, well-defined segment of a larger market. |
| Non-Dilutive Funding | Financing that does not require giving up equity, such as grants or subsidies. |
| Non-Disclosure Agreement (NDA) | A legal contract ensuring that sensitive information is not disclosed to third parties. |
| Payback Period | The time required for profits from a customer to cover the cost of acquiring them. |
| Pipeline | The number and value of potential sales existing within the funnel. Can include leads and sales opportunities. Usually used in B2B |
| Pitch Deck | A short presentation used to communicate a startup’s business idea and investment opportunity. |
| Pivot | A change in a startup’s business model or product based on market feedback to find better growth or product-market fit. |
| Platform Business Model | Creates value by facilitating exchanges between interdependent groups (e.g., consumers and producers). |
| Pre-seed | The earliest stage of startup funding, usually before product or market validation. |
| Product Fit | Extent to which a product/service satisfies the market demand. |
| Product Roadmap | A strategic plan to create a product, describing the individual steps to be taken to meet a set of goals |
| Proof of Technology | Demonstration that the underlying technology functions as intended and can scale. |
| Purchase Funnel | A model of the steps an individual goes through in deciding to buy and become a customer. Usually B2C |
| Public Relations (PR) | The practice of managing a company’s image and building relationships with media and the public. |
| Qualified Investor | An investor who meets certain criteria (wealth, experience) to invest in private or high-risk offerings. |
| Qualified Lead | A potential customer who meets specific criteria indicating a high likelihood of conversion. |
| Qualifying Opportunities | Determining if a lead has characteristics to be in the target market and potential sale. |
| Quarterly Review | A periodic assessment of company performance, typically every three months. |
| Quick Ratio | A measure of a company’s ability to meet short-term liabilities with its most liquid assets. |
| Regulatory Compliance | Adhering to laws, regulations, and guidelines relevant to the business. |
| Research and Development (R&D) | Activities focused on developing new products or improving existing ones. |
| Return on Investment (ROI) | Measures the gain or loss generated by an investment relative to its cost. |
| Revenue Model | The strategy a company uses to generate income from its products or services. |
| Runway | The time a startup can operate before running out of money, based on its burn rate. Typically measured in months. |
| Run Rate | Annual recurring revenue |
| Simple Agreement for Future Equity (SAFE) | A financing contract allowing investors to provide capital now in exchange for future equity; often used in early rounds. |
| Sales Architecture | The structure and strategy used to sell and distribute the product. |
| Search Engine Marketing (SEM) | Paid search ads |
| Search Engine Optimization (SEO) | Efforts to increase visibility of a website on search engines in natural search |
| Seed Round | First major round of financiaing for a startup |
| Series A | The first significant round of venture capital financing for a startup after seed funding. |
| Series B | A later-stage funding round, typically used to scale the business and expand operations. |
| Spin-off | Companies or Startups that emerge from universities or research institutes to commercialize research, technology and knowledge developed at the univestity/institute. |
| Talent Acquisition | The process of attracting and hiring top talent to support company growth. |
| Term Sheet | A non-binding agreement outlining the terms and conditions of an investment. |
| Top-down Forecast | A high-level financial projection starting from total market size and estimating share. |
| Total Addressable Market (TAM) | Total market that the products/service can target |
| Unicorn | A privately owned startup valued at over US$1 billion. |
| Underlying Magic | The unique technology, insight, or innovation that differentiates the company from competitors. |
| Unique Selling Proposition (USP) | The distinctive advantage or feature that sets the company apart in the market. |
| Unit Economics | The direct revenue and cost associated with serving one customer or selling one unit. |
| Vanity Metrics | Superficial metrics that look good on paper but don’t indicate real growth (e.g., app downloads). |
| Value Inflection Points (VIPs) | Key milestones that significantly increase the company’s valuation or traction. |
| Value Proposition (VP) | Benefits of product/service to target customers. Can be UVP as Unique VP |
| Venture Capital (VC) | Venture Capital (VC) is a form of private equity financing provided to startups and small businesses with high growth potential, in exchange for equity or ownership shares. |
| Virtual Stock Ownership Plan (VSOP) | A plan mirroring the benefits of an ESOP but providing cash and not ownership. Also called PSOP as Phantom SOP. |
*The glossary is updated regularly to reflect the terms and latest practices in the startup world.