As a recent graduate preparing to step into the vibrant and dynamic startup world, it's important to familiarize yourself with the language of the industry. Understanding these terms will not only help you navigate job descriptions and interviews more confidently but also enable you to contribute effectively from day one. Here's a list of essential startup and business terms you should know.
Angel Investor: A wealthy individual who provides funding for startups, typically in exchange for ownership equity or convertible debt.
Bootstrap: This refers to a situation where an entrepreneur starts a company with little capital, relying on money other than outside investments.
Burn Rate: The rate at which a startup is spending money, usually on a monthly basis, before it starts generating income.
Convertible Note: A type of short-term debt that converts into equity, usually in conjunction with a future financing round.
Equity: Ownership interest in a company, usually in the form of shares of stock.
Exit Strategy: A plan for selling your stake in a business, typically via a merger, acquisition, or initial public offering (IPO).
Incubator: An organization designed to help new startups succeed. They help with business skills, networking opportunities, office space, etc.
Initial Public Offering (IPO): The process by which a private company becomes publicly traded on a stock exchange.
Lean Startup: A methodology for developing businesses and products, aiming to shorten product development cycles and rapidly discover if a proposed business model is viable.
Minimum Viable Product (MVP): A product with just enough features to satisfy early customers, and to provide feedback for future product development.
Pitch Deck: A brief presentation that provides your audience with a quick overview of your business plan.
Pre-Money and Post-Money Valuation: Pre-money valuation refers to the value of a company before it goes public or receives other investments, whereas post-money valuation refers to its value after outside financing and capital injections are added to its balance sheet.
Product-Market Fit: A stage where a company has successfully identified a target audience with a specific need and has created a product that fills that need.
Runway: How long a startup can stay alive (usually in months) if its income and expenses remain constant.
Seed Capital: The initial capital used to start a business, often provided by the founders themselves or friends and family.
Series A, B, C, etc. Funding: These represent the various rounds of funding that a startup may go through as it grows.
Unicorn: A startup company valued at over $1 billion.
Vesting Schedule: The set period of time before shares are owned outright by an employee.
Venture Capital (VC): This is financing that investors provide to startup companies that are believed to have long-term growth potential.
Vertical and Horizontal Scaling: Vertical scaling, or "scaling up", means adding resources (like more power) to a single node in a system, whereas horizontal scaling, or "scaling out", involves adding more nodes to a system.
These terms represent the core jargon of the startup world. However, this space is always evolving and new terminology may emerge as you delve deeper into your career. Stay curious and keep learning!
