{"id":1887,"date":"2020-09-01T11:39:54","date_gmt":"2020-09-01T11:39:54","guid":{"rendered":"http:\/\/nifty.bold-themes.com\/demo-02\/?page_id=1887"},"modified":"2023-06-07T06:38:55","modified_gmt":"2023-06-07T06:38:55","slug":"startup-terminologies","status":"publish","type":"page","link":"https:\/\/silverneedle.vc\/startup-terminologies\/","title":{"rendered":"Startup Terminologies"},"content":{"rendered":"
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Startup Terminologies<\/span><\/span><\/h1>
For first-time founders and startup enthusiasts, we will explain some of the common startup terminologies you might hear and read in newsletters\/sessions\/podcasts.
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Growth Hacking<\/span><\/span><\/h4>
Growth Hacking is a startup term that was coined by Sean Ellis and it basically describes a marketing technique that focuses on quickly finding scalable growth through non-traditional and inexpensive tactics such as the use of the internet or social media.<\/div><\/header>
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The objective of growth hacking strategies is generally to acquire as many users or customers as possible while spending as little as possible. This is a technique that can scale your startup at any stage and should always be experimented around.<\/p>\n<\/div>

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MVP<\/span><\/span><\/h4>
A minimum viable product or MVP, is a product with enough features to attract early-adopter clients and validate a product idea early within the product development cycle. In industries together with the software programs, the MVP can help the product team receive consumer feedback as quickly as possible to iterate and enhance the product.<\/div><\/header>
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For example – Airbnb<\/b><\/p>\n

With no money initially to build a business, the founders of Airbnb used their own apartment to validate their idea to create a market offering short-term, peer-to-peer rental housing online. They created a minimalist website, published photos and other details about their property, and found several paying guests almost immediately<\/p>\n<\/div>

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Accelerator Program<\/span><\/span><\/h3>
An accelerator for startups is a short-term growth strategy that encourages years of growth in a matter of months. Consider them a market preparedness and investment development boot camp. <\/div><\/header>
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\u00a0<\/span>Scaling a business is the main objective of an accelerator programme. Programs provide one-on-one meetings with programme advisors, which is helpful feedback. They’ve had success building firms, attracting investors, and breaking into new markets. In coworking spaces and workshops, businesses collaborate with other startups. Through mentorships and the accelerator’s alumni, you get unmatched access to successful entrepreneurs. The programme frequently provides funding to participants. At the program’s conclusion, they also make an investor pitch. Investors view an accelerator as a badge of honour. Participation in a prestigious programme demonstrates your team’s talent, motivation, and training.<\/p>\n<\/div>

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BootStrapped<\/span><\/span><\/h3>
Have you heard of the term 'Bootstrapped'? It refers to startups that have been built and grown without external funding from venture capitalists or angel investors. Instead, they rely on their own resources and revenue to finance their growth.
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With many types of mortgages and interest rates on the market, it can be confusing to know which one is right for you, so we’ve outlined some of the basic below.<\/p>\n<\/div>

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\u00a0<\/span>A great example of a successful bootstrapped company is Basecamp, a project management and collaboration tool. Since its founding in 1999, the company has grown to over 50 employees and millions in revenue, all without outside funding. This has allowed them to maintain complete control over their direction and decision-making, and to focus on building a sustainable business model.<\/p>\n

The bootstrapped approach is not for every startup, but it’s a testament to the determination and resourcefulness of entrepreneurs.<\/p>\n<\/div>

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Product Market Fit<\/span><\/span><\/h4>
The extent to which a product satisfies a significant market demand is known as product-market fit. The first step in creating a successful venture has been defined as achieving product\/market fit, during which the business interacts with early adopters, receives feedback, and assesses the interest in its offering(s).
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Product\/market fit is not binary. A basic level of product\/market fit won’t be sufficient for a startup firm to get traction in the market and succeed. Instead, a high level of product\/market fit, or extreme product\/market fit, is actually necessary.<\/p>\n<\/div>

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EBITDA<\/span><\/span><\/h4>
EBITDA, or earnings before interest, taxes, depreciation, and amortization, is a measure of a company's operating performance. It takes into account a company's earnings before any expenses related to financing and accounting practices, such as interest payments or taxes, as well as any expenses related to the depreciation or amortization of assets.<\/div><\/header>
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\u00a0<\/span>EBITDA is often used by investors to evaluate a company’s ability to generate cash flow and profitability, as it provides a clearer picture of a company’s underlying operating performance, without the influence of non-operational factors such as accounting methods or capital structure.\u00a0<\/span><\/p>\n

In conclusion, EBITDA is a vital metric that investors use to evaluate the financial performance of a company.<\/p>\n<\/div>

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Pivot<\/span><\/span><\/h4>
As the startup ecosystem continues to evolve, entrepreneurs must remain nimble and open to change in order to succeed. One of the most common terms used in startup circles is ``PIVOT,`` which refers to the act of shifting a company's strategy or direction in response to changing market conditions or customer needs.<\/div><\/header>
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By remaining adaptable and willing to pivot when necessary, entrepreneurs can increase their chances of success and ensure that their products or services remain relevant in a constantly evolving marketplace.<\/span><\/p>\n



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CAP Table<\/span><\/span><\/h4>
A cap table, short for capitalization table, is a spreadsheet or document that shows the ownership of a company in terms of its equity and the distribution of that equity among its shareholders<\/div><\/header>
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The cap table records each investor’s percentage of ownership, the type of securities they hold (such as common stock, preferred stock, options, or warrants), the amount they paid for those securities, and any terms or conditions attached to those securities (such as conversion rights or liquidation preferences).<\/span><\/p>\n

The cap table is important for understanding the ownership structure of a company, how much each investor has invested, and how much they stand to gain in the event of an acquisition or IPO.<\/span><\/p>\n<\/div>

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Customer Acquisition Cost <\/span><\/span><\/h4>
Customer Acquisition Cost (CAC) is the cost incurred by a company or organization to acquire a new customer. This cost includes all expenses associated with marketing, advertising, and other activities aimed at acquiring new customers.
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The formula to calculate CAC is: <\/span>CAC = (total cost of sales and marketing) \/ (number of new customers acquired)<\/span><\/p>\n

CAC is an important metric for businesses, as it helps them understand the effectiveness of their marketing and sales strategies. If the CAC is too high, it may indicate that the company needs to adjust its marketing tactics, reduce costs, or improve its customer retention strategies to increase profitability.<\/span><\/p>\n<\/div>

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Series A, B, C Funding<\/span><\/span><\/h4>
Series A, Series B, andSeries C funding are each forms of fundraising for startups at various stages of their development. The world\u2019s largest technology firms have, almost without exception, passed through each of these fund raising rounds at the beginning of their journey.<\/div><\/header>
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  • Series A: At this stage, the company has usually established its business model and has some traction in the market.<\/span><\/li>\n
  • Series B: Once a startup has achieved some level of success and has shown a strong growth trajectory, it can seek Series B funding.<\/span><\/li>\n
  • Series C: This is the final stage of private funding for a startup before it goes public or gets acquired. At this stage, the company has a significant market share, a solid customer base, and a proven business model.<\/span><\/li>\n<\/ul>\n<\/div>
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    Runway<\/span><\/span><\/h4>
    ``Startup runway,`` a term that refers to the amount of time a startup has before it runs out of money. As a founder, it's essential to understand your startup's runway so that you can make informed decisions about funding and growth.<\/div><\/header>
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    It is calculated by dividing the amount of cash a startup has by the monthly burn rate, which is the amount of money the startup spends each month to cover its operating expenses.<\/span><\/p>\n<\/div>

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    Pitch Deck<\/span><\/span><\/h4>
    A pitch deck is a presentation that entrepreneurs put together to raise funds from investors.
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    It typically includes information about the company’s business model, market opportunity, team, financial projections, and more.<\/p>\n<\/div>

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    Alpha Testing<\/span><\/span><\/h4>
    Alpha testing is the first phase of testing where a small group of users test the product in a controlled environment. This helps identify any major issues before moving on to beta testing.<\/div><\/header>
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    It is calculated by dividing the amount of cash a startup has by the monthly burn rate, which is the amount of money the startup spends each month to cover its operating expenses.<\/span><\/p>\n<\/div>

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    Return on Investment<\/span><\/span><\/h4>
    Today's term is ROI or Return on Investment. ROI is a key metric used by investors to evaluate the profitability of an investment.<\/div><\/header>
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    It measures the amount of return on an investment relative to the investment’s cost. A high ROI indicates that the investment is profitable, while a low ROI indicates that the investment is not profitable.<\/span><\/p>\n<\/div>

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    Sweat Equity<\/span><\/span><\/h4>
    Sweat equity is a non-monetary contribution that the individuals or founders of a company make towards the company.<\/div><\/header>
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    \u00a0Instead of investing money in a business, an individual invests their skills, knowledge, and time to help the company grow.\u00a0<\/span><\/p>\n<\/div>

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