Ultimate Startup Glossary: Key Terms and Abbreviations Explained for EntrepreneursThis glossary covers a range of essential concepts, from financial mechanisms to strategic approaches, that are integral to understanding and engaging with the startup ecosystem.
Angel InvestorAn individual who provides capital for a business startup, usually in exchange for convertible debt or ownership equity.
BootstrappingThe process of starting a company with personal finances or the operating revenues of the new company.
Burn RateThe rate at which a new company is spending its venture capital to finance overhead before generating positive cash flow from operations.
Cap Table (Capitalization Table)A table providing an analysis of the founders' and investors' percentage of ownership, equity dilution, and value of equity in each round of investment.
Convertible NoteA form of short-term debt that converts into equity, typically in conjunction with a future financing round.
Due DiligenceAn investigation or audit of a potential investment or product to confirm all facts, such as reviewing all financial records, plus anything else deemed material.
EquityThe ownership interest of investors in a startup, represented in the form of shares.
Exit StrategyA strategic plan developed by a business owner to sell their investment in a company they founded.
IPO (Initial Public Offering)The first time that the stock of a private company is offered to the public.
Lean StartupA methodology for developing businesses and products, which aims to shorten product development cycles and rapidly discover if a proposed business model is viable.
MVP (Minimum Viable Product)A version of a product with just enough features to satisfy early customers and provide feedback for future product development.
PivotA structured course correction designed to test a new fundamental hypothesis about the product, strategy, and engine of growth.
Pre-Money ValuationThe valuation of a company prior to an investment or financing.
RunwayThe amount of time until a startup goes out of business, assuming current income and expenses stay constant.
Seed CapitalThe initial capital used to start a business, often coming from the founders' personal assets, friends, or family, and typically representing the first official money that a business venture or enterprise raises.
Series A/B/C FundingRefers to the different stages of financing a startup goes through as it grows and expands. Each series has different investor expectations, and the stakes sold become progressively larger.
Startup AcceleratorA fixed-term, cohort-based program, that includes mentorship and educational components and culminates in a public pitch event or demo day.
Term SheetA non-binding agreement setting forth the basic terms and conditions under which an investment will be made.
UnicornA startup company valued at over $1 billion.
VC (Venture Capital)A form of private equity and a type of financing that investors provide to startup companies and small businesses that are believed to have long-term growth potential.
Bootstrap Or Seek Venture Capital?
Bootstrap Or Seek Venture Capital?
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