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STARTUP JARGON – NDRC GUIDE


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Accelerator

An accelerator is a programme designed to rapidly grow a startup through a combination of mentorship, access to technology, office space and, sometimes, capital. A pre-accelerator is a programme focused on early-stage startups, that addresses problem/solution fit.

Activation

Another word for a product – or company – launch.

Advisor

An individual providing business connections, guidance, advice and support to entrepreneurs as they develop and grow their startup.

Alpha Test

Internal testing, of a pre-production model, typically on a controlled basis, with the objective of identifying functional deficiencies and design flaws.

Angel Investor

An unrelated individual investing monies in a business venture, often later than founders, friends and family (the “3F’s”), but before larger corporate investors such as venture capitalists (“VC’s”).

Angel Round

A round of investment into a startup company from angel investors not previously affiliated with the founder. Typically, the first money invested in a company after the founders’ own money, and the founders’ friends and family.

Bootstrapping

When the company founder is having to rely on savings and money from friends and family to grow the business in its very early stages.


Business Model Canvas

Business Model Canvas is a strategic management and lean startup template for developing new – or documenting existing – business models.

Burn Rate

How quickly you spend your capital; some startups find that they spend more early on, but others find their spend is fairly even.

Cap Table

The cap table is a record of ownership. The cap table provides an analysis of the founders’ and investors’ percentage of ownership, equity dilution, and value of equity in each round of investment.

Convertible Note

A debt instrument that can be converted into another security, such as shares of common or preferred stock.

Crowdfunding

Crowdfunding is the process of raising financial support for a venture via smaller amounts from many investors (“the crowd”), rather than the alternative pattern of larger amounts from a smaller number of supporters.

CSF

Competitive Start Fund. Enterprise Ireland programme that sees €50,000 investments put into startups (10 per cent equity) to develop a minimum viable product and further customer validation.

Customer Lifetime Value

A forecast or prediction of the total net profit related to the entire lifetime, (present and future) of a specific customer relationship.

Demo Day

Where the graduating cohort of an accelerator is given a chance to pitch to investors. 2.


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Digital Nomad

A term used to describe someone who works online, and therefore often works from home, in co-working spaces, or is based abroad.

Disrupting

When a startup sets out to revolutionise its sector or industry.

Due Diligence

A process undertaken by potential investors — individuals or institutions — to analyse and assess the desirability, value, and potential of an investment opportunity.

Elevator Pitch

An elevator pitch is a brief presentation, typically 30 – 60 seconds in duration, presenting the entrepreneur’s concept/solution, business model, “go to market” strategy and value proposition to potential angel or venture capital investors, in order to obtain the attention of the investors, such that they are compelled to learn more about the opportunity.

Entrepreneur

A person who organises and operates a business or businesses, taking on greater than normal financial risks to do so. Entrepreneurs are the founders of startups and are the people angel investors support.

Equity

This designation is given to a stockholder’s ownership in a company.

Exit strategy

How you plan to sell the business, pay investors back and create a nest-egg for your future.

Failure

A great learning opportunity!


Founder’s Agreement

A formal written agreement among the founders of a startup which documents the founder’s accord on ownership, roles and responsibilities, company governance/decision-making and operations.

Full-stack developer

A developer with specialised knowledge in all areas of software development.

Funding

This term is used synonymously with the words “financing” and “capital.” It refers to the amount of money that is needed for a business.

Grant

Money provided by a government agency or other organisation that does not need to be repaid and does not purchase equity.

Hockey stick

When a startup experiences steady growth and then a sudden rise, so that on a graph it looks a bit like a hockey stick.

Initial Public Offering (IPO)

The sale or distribution of a stock of a portfolio company to the public for the first time.

Later Stage

A stage of company growth characterised by viable products, a developed market, significant customers, sustained revenue growth, and both profits and positive cash flow from operations.

Lead Investor

The primary investor of a syndicated round of financing.

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Local Enterprise Office (LEO)

Provides advice, information and financial support to you in starting up or growing your business.

Market Capitalisation

The total dollar value of all outstanding shares.

Marketplace

Online repository of people buying and selling goods or services (Airbnb, Etsy, HouseMyDog etc).

Meet-up

A website which enables the facilitation of online inperson meetings of groups with similar interests. Local meet-up groups focus on a wide variety of interests, including technology, entrepreneurship, investments and startups from the entrepreneurial world.

MVP

This is the Minimum Viable Product. It’s the service or product that has the highest return on investment versus the risk/effort involved.

One-Liner

A one liner is a clear, crisp, engaging sentence which provides potential investors a succinct overview of your startup concept and business model.

Option

A security granting the holder the right to purchase a specified number of a Company’s securities, at a designated price, at some point in the future.

Peer-to-Peer Lending

A relatively new type of online financing solution through which individuals lend money to other individuals or small businesses.


Pipeline

The continuing flow of upcoming business or underwriting deal opportunities.

Pitch deck

A short presentation used to pitch your business plan to potential investors.

Pivot

This is when one or more of your products or services has failed, so you take the company in different direction.

PaaS

Platform-as-a-Service.

Post-money valuation

The valuation of a startup immediately following its most recent round of financing.

Pre-money valuation

The company’s value immediately before funding.

Raising capital

Raising capital refers to obtaining capital from investors or venture capital sources.

Return on Investment (ROI)

This term is also referred to as the rate on return (ROR) or rate of profit.

Risk

The probability that part or all of an original investment will be lost or that investment returns will be lower than anticipated.

SaaS

Software-as-a-Service.

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Scale up

The process by which a business plans to grow in terms of size, market, geographical location, etc.

Search Engine Optimisation (SEO)

Processes and methods used to increase or boost site rankings or the frequency in which a websites search results are returned by an internet search engine as part of a process to maximise user traffic to the site.

Seed capital

Seed Capital is the money used to purchase equitybased interest in a new or existing company.

Seed round

The first period during which a startup is looking for funding or investment. Normally this is followed by a ‘Series A round’ where a second set of investors come on board at a higher price than the first round.

Serial entrepreneur

An entrepreneur who has previously founded and run one or more ventures.

Shareholders Agreement

An agreement signed during a financing transaction by all of a company’s shareholders in which they agree in advance to certain provisions.

Sprint

In the tech and startup communities, a sprint is a process in which entire teams pitch in and work together to complete a defined objective in a short period of time.

Startup

A startup is a new business venture/enterprise in its initial or early stages of development. These stages include the concept, seed and early growth.


Stealth mode

When a startup keeps its products or services under wraps, so it doesn’t alert potential competition.

Stock options

The right to purchase or sell a stock at a specified price within a stated period.

Sweat equity

Sweat equity is the equity or ownership interest created in a startup by it’s founders as a result of their contributions in the form of hard work, labour and toil.

Terms sheet

A non-binding agreement or template that outlines an overview of the terms and conditions between the entrepreneur and investor.

UI designer

A designer in the tech world who has a principal focus on how the product is laid out, e.g. User Interface.

UX designer

A designer in the tech world who has a principal focus on how the product feels e.g. User Experience Designer.

Unicorns

Startups that have been valued at more than $1 billion, such as Instagram, Evernote and Shazam. Although in reality, unicorns are beyond startup stage.

Valuation

The process of establishing the value or worth of an asset or a company.

Value proposition

A statement a company utilises to express why customers should purchase their product or service, as compared to that of a competitor.

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Vanity metrics

Figures and statistics that are often used to show the growth of a startup that don’t actually mean anything, i.e. 2,000-to-200,000 impressions on Twitter, winning awards or startup competitions.

VC

A venture capitalist invests people’s money into earlystage, high-growth startups in return for equity.

Venture

Venture is often used for referring to a risky start-up or enterprise company.

Vesting

A process in which you “earn” your stock overtime.

Wantrepeneur

An individual who continuously ponders, desires or wants to start a business, acts as if they are an entrepreneur but fails to take the steps necessary to establish and operate a business.

Wireframe

A visual depiction in the form of a schematic or blueprint that represents the framework of a website and related web pages. Typically low tech, it lacks in “look and feel” characteristics, focusing more on the layout of the pages and arrangement of the content, including potential navigational processes.


Notes

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www.ndrc.ie NDRC Digital Exchange Crane Street, Dublin 8 D08 HKR9 Ireland

NDRC Startup Jargon Guide  

A guide to startup terms.

NDRC Startup Jargon Guide  

A guide to startup terms.

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