StartUp Related Terms and Their Meanings

In this post we compile a list of Startup related terms and their meanings.

Incubators:

Incubators are organizations that help startups graduate from the idea stage by helping them launch their business. Incubators often mentor startups entrepreneurs and provide them with access to resources like workspace, training and other services needed to help them get their business off the ground.

Accelerators:

Accelerators are organizations that run fixed term programs designed to help early stage startups scale rapidly. Accelerators provide startups with access to capital, extensive training and mentorship from industry veterans and networking opportunities within the startup ecosystem.

Angel Investors:

Angel Investors are investors who provide seed capital to early stage startups to help them launch products or services and grow their business. Typically an angel investor would invest capital into a startup in exchange for equity.

Venture Capitalists:

Venture Capitalists are professional investment firms that invest in growth stage startups with a demonstrated product-market fit with the intention of helping them grow rapidly.

Equity Funding:

Equity funding is raising capital in exchange of ownership rights in the business.

Debt Funding:

Debt funding is raising capital through loans.

Bootstrapping:

Bootstrapping is financing a business or startup through self funding.

Seed Funding:

Seed Funding is the first round of external funding that a early stage startup receives to help it launch a product a product or service.

Funding Series:

These are subsequent rounds of funding (eg. Series A, Series B) that a startup receives after it has launched a product or service in the market and has demonstrated a product-market fit. Funds raised during this stage are typically utilized to help the startup grow by increasing its user base or expand its product/serving offering.

Crowdfunding:

Crowdfunding is the art of financing a venture by pooling together small contributions from a large number of individuals, often through an online platform.

MVP (Minimum Viable Product):

MVP is developing a product version with only the most important or core features to enable the startup founders to test the market acceptability of the product.

Product-Market Fit:

Finding the product-market fit is demonstrating that the product/service that the startup offers has acceptability amongst its target users.

Pitch Deck:

A business presentation aimed to impress a potential investor into investing in your startup.

Freemium Revenue Model:

A Freemium revenue model is one in which a basic product version with limited features is offered for free; while the full product suite with all its premium features is made available only to the paying customers.

Recommended Read: Our post on revenue models of Internet Companies

Target Market –

The set of customers to whom the startup intends to sell its product or service offering.