Although entering the business world can be quite thrilling, it does require some preparation. Namely, you’ll have to learn new vocabulary.

While these words sound fancy and complicated, most are just ordinary words used figuratively. Still, deciphering them isn’t always easy.

But to communicate with other members of the startup world, you’ll need to understand them.

In this article, we’re going over the most common startup buzzwords you need to know as a young entrepreneur. By the end of the list, you’ll be equipped with a disarming arsenal of business jargon.

Accelerator

A photo from the Y Combinator accelerator

An accelerator promotes the growth of a startup. Entrepreneurs employ these programs to scale their companies as fast as possible. They usually last from 3 months to one year.

Btw, we have an article with UK accelerators and incubators. You might want to check it out if you’re from Europe.

Agile as a startup buzzword

In business parlance, being agile means responding to fluctuations in market demand immediately.

In software development, agile management means focusing on slow steady steps instead of going for big launches. This gives a company the opportunity to gain customer feedback and use it to improve the product continuously.

Angel Investment/angel investors

Angel investors grant early-stage startup funds in exchange for a stake in the company. Amazon CEO Jeff Bezos is a famous angel investor who invested in both Google and Uber.

Bleeding edge

When a company is on the bleeding edge, it means it is making ground in new technology or approach.

Bootstrapping

Bootstrapping is a form of reinvestment. When a company makes a profit, the leader uses the money to develop it further. This gives their business financial independence.

Without having to rely on other investors, a founder gets to keep full control of their company.

Bridge loan

This is a short-term loan a startup can take. It generally lasts from two weeks to three years. It is synonymous with a swing loan and often helps a company survive till it acquires long-term financing.

Burn Rate

Burn rate refers to how fast a company spends or ‘burns’ its investors’ assets. This always refers to negative cash flow because the company hasn’t become profitable yet.

Burn rate is a great way to keep track of the company’s spending. It’s generally evaluated every month.

Cottage business

Cottages are small, unpresuming buildings. A cottage business is essentially the same.

This type of company operates on a small scale and rarely intends to expand. A good example would be selling homemade goods on Etsy.

Crowdsourcing

Also known as crowdfunding, this method refers to sourcing ideas or funds from a crowd. With the advance of technology came many platforms that make this much easier.

Customer journey

The customer journey encompasses every moment a customer has interacted with a business. It doesn’t mean just buying a product, it can be simply visiting the company’s web page.

Decacorns

A decacorn is any company that passed the 10 billion dollar valuation mark. WhatsApp and Snapchat are some of the most famous decacorns.

Dragon

A dragon is any startup that managed to raise 1 billion dollars from investors in just one round.

Early adopters

Early adopters are valuable product-tester during the company’s early stages. However, they are not its final target audience.

Equity financing

Equity financing increases the company’s funds. It does so by selling shares to potential shareholders.

These investors then receive dividends or wait for an exit such as an initial public offering or acquisition. This way, they can recover their investment.

Exit Strategy

When the company wishes to leave a certain market sector, it must have a good exit strategy in mind. This will help them achieve their goal without gaining debts or losing shareholder equity. This strategy helps the company seize a market opportunity the moment it arises.

An exit means transferring the ownership of your company to another one while repaying your investors.

First Movers Advantage

YouTube player

This is an advantage of a company that comes up with a certain product first. This helps them find solid footing in the target market. Think of it as a halo effect. Customers look more favorably to those who come first.

Thus, FMA helps the startup build brand recognition and customer loyalty.

Gamification/Gamify

True to its name, gamification means including game-like elements in a product or service. This can be anything from milestone rewards to competition with other users.

This marketing technique can motivate consumers to use the product more often.

Growth equity

Growth equity benefits startups that have good growth potential but lack the necessary capital. This form of private equity investment helps such businesses grow further.

Companies must have a functional business plan and positive cash flow to be eligible for this type of investment.

Incubator

Contrary to accelerators, incubators fund startups during their early stages. These organizations practically babysit the new company for the first couple of months. Sometimes, this arrangement can last for years too.

Of course, it isn’t for free. Incubators get equity in return.

Lean startup

This type of startup has to work with lean resources. In other words, with minimal funds. Every entrepreneur dreams of this kind of opportunity because it helps them avoid debt.

Many software companies are lean startups because they only need hardware and professional programmers to function.

Low-hanging fruit

A low-hanging fruit is one you can reach easily. In the business world, this refers to a product that is ready or almost ready to enter the market. This product must also have strong potential to be monetized.

Mobile-first

Of all the startup buzzwords, mobile-first is the most self-explanatory one. It simply means that a product initially focuses on mobile phones rather than computers.

If the product does well on the small screen, the company can adapt it to bigger devices later.

LTV and CAC

YouTube player

LTV or lifetime value of users tells you how much money you get from your customers.

On the other hand, CAC refers to the cost of acquiring a user.

Logically, your LTV should always be higher than your CAC. If a startup wishes to be successful, it has to keep this ratio stable.

Minimum viable product (MVP)

No, MVP doesn’t stand for the most valuable player. In business jargon, it refers to a minimum viable product.

An MVP is important during a startup’s early stages. This prototype version of a new product must appeal to its early adopters.

As its name implies, it’s the cheapest and least developed product that consumers are willing to buy. Many investors first ask companies to release an MVP before they invest in the business. Their funds then help develop the product further.

OPM

OPM or other people’s money refers to financial leverage. It represents borrowed capital which a company can use to grow itself.

Pain Point

Pain points represent the problems customers deal with daily. A startup’s goal is to capitalize on these problems by devising solutions. If the customers like this solution, the startup will start scaling rapidly.

Pitch Deck

In the startup dictionary, a pitch deck is a simplified version of the company’s business plan. Its main purpose is to attract would-be investors. It usually takes the form of a short 10-slide PowerPoint presentation.

To achieve the best results, the pitch should be as brief and on-point as possible.

Pivot

Pivoting means using the company’s tech and resources for a new purpose. It can also refer to branching out to a new market section or changing the company’s objective.

Ramen Profitable

Owners of ramen profitable companies have enough income to buy ramen dinners. However, they can’t afford to live a more luxurious lifestyle.

Retargeting

Retargeting is a strategy that aims to lure in customers who already interacted with the product via a website. It achieves this by sending banners or e-mails to would-be customers. This can entice them to buy the product.

Runway

Runway represents the time the startup has before it depletes all of its financial resources.

Scale up

A company in the scale-up stage makes enough profits to sustain itself. It then focuses on branching out to different geographic locations and market sectors to expand its customer base.

Seed funding

Seed funding is the capital a startup receives during its infant stages. The idea is that this money nurtures it from a seed to a fully grown tree. It usually comes from friends, families, or investors. Startups need this money to gather the tools and resources necessary to manufacture their product.

Stealth mode

Stealth mode means keeping a company’s product or service hidden. This keeps it safe from its rivals.

Term sheet

The term sheet lists the ownership percentage and voting rights of the company’s investors. They get these benefits in return for funding the business.

Traction

Traction is the measure of a business’s progress and momentum. It represents the rate at which the company gains value from its users. High traction means the company is doing well.

Unicorn

A unicorn is a company that reaches a 1 billion dollar valuation in just a few years. These companies are compared to unicorns because of how rare they are. Uber and Airbnb are both unicorn companies.

VC

VC stands for venture capital. Venture capitalists invest in a startup with low profitability. However, this is one of the riskiest forms of investment because they have no guarantee the company will succeed.

Vesting

Vesting means gaining ownership of a present or future payment, benefit, or asset.

Wireframe

A wireframe is a sketch of an app’s or a website’s intended look. It depicts everything from the general layout to specific graphic elements’ location.

What do zombies mean in the startup world?

This is one of our favorite startup buzzwords. Zombies are companies that barely scrape by. They have enough finances to keep going. However, they have large debts and spend all profits on covering these debts. While they can hold them off, they can never pay them back fully.

In short, these are stagnant companies without a future.

If you liked this article with startup buzzwords, I have a few more interesting ones for you. Want to know about theĀ startup mindset or about life working at a startup?

You should also check out these articles about what is considered an early-stage startup, how many shares should a startup have, what a CFO does in a startup, what a COO does in a startup, and what a CTO does in a startup.

Author

I'm the manager behind the Upcut Studio team. I've been involved in content marketing for quite a few years helping startups grow.