This is an overview of all startup terms relevant to writing your startup plan.

As I started to develop my startup idea, I talked to more and more people with a lot of experience in the startup scene. During these conversations, the hip buzzwords and terms that were unknown to me were thrown at me. Therefore, I made an overview of the most important startup terms and definitions for you, so you know what you’re talking about!

STARTUP BUZZWORDS (A-Z)

A/B TEST

A/B testing is the process of comparing two versions of a web page, email or other marketing tool and measuring the difference in performance. You do this by giving one version to one group and another version to another group. Then you can see how each variation performs.

ACCELERATOR

If you’re founding a startup and have finished writing your startup plan, accelerators can help you test your idea quickly by providing you for a few months with mentorship and possibly networking or funding opportunities.

ACQUI-HIRE

One of the most valuable parts in a startup, especially in the early stages, is the team behind it. Building a passionate team with members with complementary skills is not easy. Many established companies decide to hire smaller companies or startups to build their team. Such acquisitions are called acqui-hires.

ACTIVATION

Some software as a service (SaaS) startups offer a free trial or a freemium plan. The company will only make money if users activate their membership after the trial period. The goal is to increase the number of activations increase.

AGILE

Agile literally stands for agile, nimble and flexible. Working agile is a way of thinking, working and organizing. It enables organizations to respond quickly and effectively to changes in the outside world. Agile is best suited to situations with some degree of uncertainty where creativity and innovation are important to maximize the value of the solution.

ANALYTICS (SEO, SEA)

Search engines like Google are becoming increasingly essential to a startup’s growth.

Without them, a startup must continue to invest in paid advertising to get new customers. SEO (Search Engine Optimization) is the strategy and tactic by which companies can achieve higher search engine rankings. SEO refers to the organic (unpaid) search results.

SEA (Search Engine Advertising) is a broad term because you’re not just talking about advertising on Google’s search engine but also on other search engines. refers to the paid search results.

ANGEL INVESTOR

An angel investor is a private investor who ideally has a background as an entrepreneur. This is an international name for investors who are also known as business angels in the Netherlands and are sometimes also called informal investor.

AI (ARTIFICIAL INTELLIGENCE)

AI is a concept whereby computers perform tasks that would normally require human intelligence. In English, it is referred to as Artificial Intelligence.

BOOTSTRAPPING

Bootstrappers are entrepreneurs who combine human capital (knowledge, experience and skills) with their own savings to start and grow a startup without raising external capital.

BUYOUT

Buyouts occur when a buyer acquires more than 50% of the company, which results in a change of ownership.

B-TO-B

B2B is an international term for Business-to-Business. It often refers to companies that do business exclusively with other companies.

B-TO-C

B2C stands for Business to Consumer, where the company delivers directly to the end consumer.

BURN-RATE

One of the most frequently asked questions from investors is: what is your burn rate? This means: what is the amount the startup will spend per month over a predetermined period of time.

CAPTABLE

The captable is also called the capitalization table. This is the distribution (percentage-wise) of the shares of a startup. In addition, it also indicates how much the equity is valued in a financing round. It’s good to already think about this while writing your startup plan!

CASHFLOW

In a business, the designation for cash flow, which indicates the difference between actual receipts and expenditures. For example, the cash flow is positive when more money coming in than going out. Cash flow is negative when more money is spent than is currently coming in.

CHURN RATE

This term is used to provide insight into the outflow of customers over a given period. The percentage churn rate indicates the percentage of customers or subscribers who cancelled in a given period.

CROWDFUNDING

Crowdfunding (public financing) is an alternative way to finance a startup. The “crowd” (the public) puts money together to achieve the goal (required financial investment) of the startup. What that money will be spent on and what the crowd will get in return differs per crowdfunding form.

CUSTOMER ACQUISITION COSTS (CAC)

The total (for example: sales and marketing) costs that must be incurred to acquire a customer.

CUSTOMER LIFETIME VALUE (CLV/LTV).

This is a calculation of what one customer generates in the total period that he is customer. This means; the more often a customer purchases something from you, the higher your CLV. By calculating this KPI, the average value of a customer can be determined. Based on this, you can determine the maximum cost (CAC) for acquiring one new customer.

(PITCH) DECK

Before an investment is made, investors usually expect a quick presentation that highlights a startup’s key topics such as team, product market, traction and plan. Entrepreneurs create and use a pitch deck for investor presentations.

DISRUPTION

In business theory, a disruptive innovation is one that creates a new market and value proposition displacing established market-leading companies, products and alliances.

DUE DILLIGENCE

The English term due diligence literally means “with care’’. A due diligence verifies the accuracy of all information presented to the buyer, and provides insight into risks of the business to be acquired.

EARLY ADOPTERS

Early adopters are the first users of your product or service. They will usually give the

most honest and sometimes very direct feedback.

EXIT STRATEGY

An exit strategy is the way in which you as a business owner say goodbye to your company, with the aim of achieving the highest possible return. An exit can be made by selling all or part of your shares, for example. Another exit strategy is a merger with another business, or even a complete takeover by another company.

EXIT STRATEGY

An exit strategy is the way in which you as a business owner say goodbye to your company, with the aim of achieving the highest possible return. An exit can be made, for example, by selling all or part of your shares. Another exit strategy is a merger with another business, or even a complete takeover by another company.

FREEMIUM

Freemium is a revenue model in which a product or service (usually digital) is offered for free, but one charges money for more extensive uses or functionalities.

FFF (FRIENDS, FAMILY AND FOOLS)

If a startup founder has insufficient funds to get a loan, that person might that person might turn to family, friends and, roughly speaking, “fools” to get the startup capital together. This can be done, for example, by making them co-shareholders make: that way, they become co-owners of your company and help you with realizing your startup. The reason why the term Fools is used, is because investing in a startup without it having proven to be successful, can be seen as a stupid action. Within the LaunchPlatform, you can work with your FFF to write your startup plan, or have them look at it with you.

HACKATHON

A hackathon is an event in which students or specialists pool their knowledge to solve a particular problem within a short, set time. Hackathons are very suitable for creating new innovative business plans. This allows start-up companies can quickly gain new insights and come up with solutions.

IDEATION

Ideation is the creative process of generating, developing and communicating new ideas, where an idea is understood as a basic element of thinking that can be visual, concrete or abstract.

INCUBATOR

An incubator is an organization that establishes an “incubation process” to enable the accelerated growth of high-quality startups to successful businesses. They do this through the use of services such as workspace, coaching, services, culture, network and sometimes

(access to) capital.

IOT (INTERNET OF THINGS)

Nowadays, a lot of devices can be connected to the Internet. For this, sensors and other special hardware are used. As soon as these ‘things are online, they can communicate with each other, with their users, with organizations and other connected parties. This is convenient for the user and also valuable for the producer, because they can analyze all the user data.

IPO (INITIAL PUBLIC OFFERING)

An Initial Public Offering is the initial public offering of a company. This means that a company offers its shares for sale on the stock exchange for the first time and thus becomes a listed company for the first time. It is a way for companies to raise new capital.

GAMIFICATION

Gamification is the application of game techniques and aspects in products or services of the company. Gamification involves using game elements to motivate users and enrich their experience. Behavioral stimulation is central to gamification. This makes the company play on the user’s intrinsic motivation.

GROWTH HACKING

Growth hackers use unconventional strategies to achieve exponential growth for a company at costs that are significantly less than the “average” amounts required to achieve the same results.

HOCKEYSTICK

The hockey stick growth (graph) is a sudden and extremely rapid growth after a long period of linear growth. The term is often used to describe what happens when

a start-up company finds its niche and market conditions are positive.

INTELLECTUAL PROPERTY (IP)

Intellectual Property (IP) is an umbrella term for rights to ideas and creative concepts expressed in tangible form, such as designs, inventions, music trademarks, software, games, texts and photographs. When an entrepreneur builds an innovative solution, he can, in some cases, legally protect it by means of intellectual property right.

ITERATE

Creating an iteration is the process of redefining your product, service and/or message

based on how customers and leads respond to your business.

KPI’S

KPI stands for key performance indicators, these are the metrics by which startups assess their performance, progress and goals. Examples of KPIs are the costs for customer acquisition, customer lifetime value, and monthly or annual recurring revenue. While writing your startup plan in the LaunchPlatform, we will teach you all about KPIs and show you how you can use them too.

LAUNCHING

The “launching” of a startup is a process in which the founders first try to find and validate a business model before they can implement it. Within the validation there is an Alpha and Beta phase. Alpha is the very first version of the startup, app, product or service. It is often a rough version of what it should eventually become. Alpha is often for internal use only, to see how and if everything works well. After this comes the Alpha public version, which is the 1st version to be tested by first (public) users. Beta comes after Alpha and is a slightly refined version of the 1st version. Many of the hurdles have hopefully been removed, but now use will show how successful the product or service is. The beta audience provides constructive feedback to the startup, in order to make adjustments to it.

LEAN STARTUP

The Lean Startup is the title of a book by Eric Ries. The Lean startup method means that you keep the steps of your innovation process small. It is important that expectations (assumptions and hypotheses) about the idea are made concrete and measurable and are tested as quickly as possible in the tested in the market as soon as possible.

LOW HANGING FRUIT

Low hanging fruit is a common metaphor in business that refers to doing the easiest task or quickest result.

MACHINE LEARNING

Machine learning (ML) is the study of computer algorithms that through user experience improve automatically. It is considered a subset of artificial intelligence.

NDA (NON-DISCLOSURE AGREEMENT)

A non-disclosure agreement is a legal contract between parties under which one party

receives confidential information (receiving party) from another party who discloses that information (disclosing party) promises not to disclose that information.

MONETIZE

Sometimes in the early days of startups, it’s not exactly clear how they’re going to make money. Or in other words, how to monetize their idea.

MVP (MINIMUM VIABLE PRODUCT)

To test ideas quickly without spending a lot of resources building a product that may or may not work, entrepreneurs are encouraged to create a minimum viable product. These are the first versions of the product that contain only the core features designed to test the riskiest assumptions before building subsequent versions with more advanced features.

PIVOT

When there is a major change in the business model, such as the way how you make money, changing the customer profile or the solution (product), then you are “Pivoting. Spending too much time and money testing ideas or versions of a product is not a wise strategy. Instead, build, test and adapt. Pivot!

PROOF OF CONCEPT

This is a form of evidence, usually from an experiment or ‘pilot’ (test project), which demonstrates that a business concept is feasible and fits well with the needs of the users.

RETENTION

This is the percentage of customers that the company has managed to retain over a given period of time. The retention rate is the opposite of the churn rate, which indicates the percentage of customers that a company lost in a given period of time.

ROI (RETURN ON INVESTMENT)

When someone asks what the “return on investment” is, they want to know how much and when they will receive their money back. In your own business, ROI is your profit or loss, but in relation to your equity or to a particular investment.

RUN RATE

The run rate refers to the financial performance of a company based on the use of current financial information as a predictor of future performance. When a startup sells €100,000 in the first quarter, its 12-month run rate is €400,000.

SAAS (SOFTWARE AS A SERVICE)

A SaaS company is a company that hosts an application and makes it available over the Internet available to customers. SaaS stands for Software as a Service. This means that the software is stored on the server of a SaaS company while the user has remote access to it. Examples include: CRM, ERP, accounting, invoicing, project management and similar

services.

SCALABLE

A “scalable startup” takes an innovative idea and looks for a scalable and repeatable business model that makes it a high-growth, profitable company. Not just big, but huge. It does this by entering a large market and taking away the share of the incumbents or by creating a new market and growing it rapidly.

SCRUM

Scrum is an iterative framework for managing complex tasks. The framework questions the assumptions of the traditional, sequential approach to product development and

and enables teams to self-organize by encouraging physical co-location or close online

collaboration of all team members, as well as daily face-to-face communication among all involved team members and disciplines.

SEED CAPITAL

Seed capital is the capital that startups might need to fund initial business activities. Seed capital is intended to help a startup on its way until it generates its own money or is ready for a new investment. When this initial capital is raised, it is called a seed investment.

SERIES (A, B, C)

Series A (also known as Series A funding or Series A investment) means the first venture capital financing for a startup. The Series A round of funding follows the “seed round” of a startup and precedes the Series B round of funding. For the Series B funding round, the company must have shown some strong performance shown after the Series A round. Series B is there to accelerate growth through a larger investment round. A Series C funding round generally occurs to make the startup attractive for acquisition or to support a public offering (IPO). This is the first of the so-called “later-stage” investments.

STARTUP

In our view, not every startup is by definition a startup. For us a startup is a company with a disruptive or innovative business model that makes use of a new or emerging technology.

In addition, the ambition of the founder lies in disrupting existing markets or creating new ones. As a startup you start by writing your startup plan.

SWEAT EQUITY

Sweat equity is the contribution of a party to a project in the form of labor, as opposed to contrast to financial equity such as paying others to perform the task

perform. It does not require a monetary commitment, but can lead to future financial return.

TAM, SAM, SOM

TAM stands for the Total Available Market, so this is the total, global market size for your product or service.

SAM stands for the Serviceable Available Market, which is the part of the market you can reach. Think of your geographical reach, the type of customers you are looking for and the product you offer.

SOM stands for the Serviceable Obtainable Market, this is about the market size that you can realistically serve in the short term. This is a percentage of the SAM.

TERM SHEET

A term sheet is a non-binding document that sets forth the proposed terms and conditions

included under which an investor (VC, angel or other) will make an investment in a

startup.

TIME-TO-MARKET

While you’re busy writing your startup plan, it’s helpful to already start thinking about your Time to Market. In the startup scene, time to market (TTM) is the time it takes to get a product to the market from the time it is designed until the time it is is available for sale.

TRACTION

Traction can mean first customers or users. As the founder of a startup, you can

build traction even before building a product. Some startups built a list of tens of thousands of potential users before they released the first version of their products.

In some cases, initial traction is evaluating the key statistics of your startup. Investors will look at your traction over time to evaluate the investment opportunity.

UI / UX

User Interface (UI): The design of an application as seen by the user.

User Experience (UX): How designs from many pages and components of an application

synchronize to provide users with an experience that helps them solve the problem

or achieve the goal for which they are using the application.

UNICORN

There are only a few startups that are worth a billion dollars. Those startups are called

Unicorns.

VALUATION

Pre-money valuation (before receiving an investment): It is important for

founders, investors and other shareholders to know the valuation of a start-up

company before they receive capital. This helps in determining the

value of a startup after it is funded.

Post-money valuation (after receiving an investment): The value of

a startup increases or decreases after a round of funding. It decreases if the new

funding round puts a lower valuation on the startup to what it was worth before

it was funded. Although, in most cases, investors fund a venture

to increase its valuation and so we often see the value of a startup

after funding, post-money valuation, higher than the previous rounds.

VALUE PROPOSITION

A value proposition refers to a business or marketing statement that summarizes

why a consumer should buy a product or use a service. This

should also take into account why the customer is buying it from you and not from

any competitors. While writing your startup plan within the LaunchPlatform, we will help you focus on your Value Proposition.

VENTURE CAPITAL (VC)

This is capital that is invested in a startup with significant risk, also called risk capital. The providers of this money are “venture capitalists. A venture capitalist is a private equity investor who provides capital to companies with high growth potential in exchange for an equity stake. This can be funding start-ups or supporting small businesses that want to expand but do not have access to regular financing options such as banks.

INDUSTRIES (-TECH)

What industry are you in? I’m in the…

 

AGTECH

Agri-technology is the use of technology and technological innovation to

Improve efficiency and output of agriculture. Simply put, it is the

application of technology to improve all elements of the agricultural and growth process.

BIOTECH

Biotechnology is a (scientific) sector that uses living organisms and molecular biology to produce health-related products and is also applied in other fields such as genomics, food production and the production of biofuels.

CLEANTECH

Clean technology, is any process, product, or service that reduces negative environmental impacts through significant improvements in energy efficiency, the

sustainable use of resources, or environmental protection activities.

EDTECH

Educational technology is about facilitating learning and improving performance through the creation, use and management of appropriate technological processes

and resources.

FASHIONTECH

This is the market that focuses on developments in the field of clothing and textiles, this often has interfaces with wearable-tech and cleantech.

FINTECH

Financial technology is used to describe new technology that aims to improve and automate the delivery and use of financial services. Fintech is used to help companies, business owners and consumers to better manage their financial activities, processes and lives better by using

of specialized software and algorithms used on computers and, in increasingly, smartphones.

FOODTECH

Food technology is “the intersection between food and technology; the application of technology to improve agriculture and food production, the supply chain and the

distribution channel.

GOVTECH

Government technology is the application of solutions to modernize the public sector that promotes simple, accessible and efficient government. it’s aimed at promoting the use of technology to transform, improve services to citizens and businesses, and increase efficiency, transparency and accountability.

INSURTECH

Insurance technology refers to the use of technological innovations designed to extract savings and efficiencies from the current model of the insurance industry.

LEGALTECH

Legal technology refers to the use of technology and software to assist law firms and other legal entities with practice management, storage of documents, billing, accounting and electronic discovery.

MEDTECH

Medical technology is the technology used for medical diagnostic or therapeutic applications to be used in humans for: diagnosis, prevention, monitoring, treatment, relief or compensation of disease, injury or disability.

RETAILTECH

Retail technology refers to the use of technological innovations in the retail sector. Examples include the use of Virtual Reality and Augmented Reality to visualize products or clothing.

TRAVELTECH

Travel technology companies offer services and products focused on travel and tourism, for example: booking services, search and planning platforms, on-demand travel and recommendation sites.

WEARABLE-TECH

Wearable technology, also known as “wearables,” is a category of electronic

devices that can be worn as accessories, incorporated into clothing, implanted

into the user’s body, or even tattooed on the skin. The devices are hands-free gadgets with practical applications, powered by microprocessors and enhanced with the ability to send and receive data over the Internet.

STARTEN MET HET SCHRIJVEN VAN JE STARTUP PLAN?

Ik hoop dat jij wat hebt geleerd van deze lijst met startup termen die helpen bij het schrijven van je startup plan. Ben jij klaar om te starten? Je kan per direct aan de slag met het uitwerken van je business idee!

Yaïr Sharon

LaunchPlatform – Push to Start!