Getting your passport ready for a trip around the startup world? Trying on the “faking it until you make it” hat? Fret no more and let’s climb the tech ropes together. To complete the first part of the startup glossary, I am sharing extra ecosystem jargon words to befriend the locals with the right business lingo.
Many words start as a hype. Right now, I am excited to grasp concepts like IPO, Metaverse, and screen estate. Why? Speaking a common language is a sign of respect, inclusion, and a step forward in reaching your goal.
For example, I am the most confident to present my projects when I have all the necessary research up my rolled-up sleeves. So let’s dive into it!
Top 10 tech startup terms entrepreneurs should know
#1 Bridge loan or swing loan
Depending on the area, a bridge loan or a swing loan is a short-term loan. Like a bridge to cross over or a vine to swing between acts, an entrepreneur needs to move forward in the urban jungle.
You can borrow money between a month or three years to develop, for example, an MVP; or until your funding round comes in. This will allow the cash flow tide to rise, but beware, as so will the interest rate.
#2 Burn rate or run rate
It’s about how talented you are at spending the money. The burn rate is a good indicator for, let’s say, a future investor. A savvy angel or VC will look at the previous burn rate or run rate to see a track record of how fast you have spent your money.
This doesn’t have to be a bad thing, though. If it’s high, you should show a good roadmap of spending, earnings, and targets achieved to showcase proof of how scalable your solution is. For example, for a 400K euros initial investment, your burn rate should be around 30K-35K euros per month.
The marketing concept can be used by savvy entrepreneurs to scale their solutions internationally. The gist is to encourage local entrepreneurs to invest in the model.
The method is based on sharing the concept of the business for customer loyalty and brand awareness. Local branches can benefit from well-established processes, while they have the advantage of knowing the market.
If you already have the funds and you want to scale faster to other regions, you can also do it through mergers and acquisitions – M&As.
The marketing term isn’t new, it’s quite a staple when developing your MVP and serving your first clients. With a freemium business model, you are giving away part of your product to be tried out.
This means that more people can test it and offer feedback, so you can improve. It is also a great opportunity to get somebody hooked and then present them with extra features as an upselling method.
The Minimum Viable Product is one of the most important steps when building your technological solution. It’s the draft structure of your product or service, which is necessary to achieve proof of concept.
Early adopters can test an MVP for free and based on their feedback you can continue adding up features…or even pivot into something different. It’s a mix of cliches like “build it and they will come” with “the client is always right”. If you listen and adapt, you will be on the right track!
#6 Pitch deck
If I were to ask you to step inside an elevator and ride with me for 2-3 minutes, how would you present your solution, so I can understand it? This is the elevator pitch and the angle of the perfect pitch deck.
With the idea in mind, develop a PowerPoint presentation of no longer than 7-10 slides, taking into account the beginning and end. Time is money, and this presentation should aim to be delivered like an imaginary punch: concise and fast.
What challenges are you tackling in the market? How will you do it? Who is your target? Can you show a client’s feedback via video? Answer these, focus on numbers, and present your team superstars to begin the funnel of convincing investors.
Change is the only constant. Pivoting might be one of my favorite words in the tech startup ecosystem and life. It offers a sense of direction, even if you don’t know exactly where you are heading.
Most of the time, the journey is the asset. It means you are taking the technology that you have spent sweat and tears producing towards a new goal, but it can also represent you decided to tackle a new target or market altogether.
#8 StartUp to ScaleUp
A startup is a company in its early growth stage of operation, usually in its first three years. It can also mean a profitable business that is speeding up exponentially into a scaleup.
Now, a scaleup is a developmental phase where the company has grown in size, it has shown scalability at an international level, and even in different industries. This summarizes a company that has a valid product or solution and can support itself on the market.
#9 Seed funding
First comes pre-seed, then comes seed, next follows series A, B, C, and hopefully IPO. Funding is essential for growing your startup.
You begin with pre-seed funding to get things off the ground. Usually, funding starts with the three Fs – family, friends, and, well, “fools”, as they say in the tech startup community about people without an investment background. This is to test the solution in shaky waters.
The second funding is the seed round used to scale the business. Here is where angel or business investors join the party and prepare the terrain for the following series A, B, and C, where VCs tend to take over. Accelerators or incubators are a good tool to tap into the community’s resources.
#10 Value proposition
No matter if you have the first-mover advantage, are an innovator in a niche; or you are tackling the same challenge with a different solution or a different challenge with the same solution, you have to think about what makes your proposal unique.
The value proposition, or USP – a unique selling point, is an attractive feature about your product or service that can make you stand out on the market. Even if you can offer more, focus on one to attract attention. But which feature to promote? The one which would be most popular on the market in that period, not necessarily the one you are most proud of.
There you have it, another 10 startup words to take baby steps into the tech environment and upgrade your conversational lingo. Next time you are scrolling through LinkedIn, be sure to use them wisely to stir up conversations #likeaconnoisseur.
Grégoire Vigroux is a French Serial Entrepreneur and Business Angel, based in Romania since 2006. He co-founded and invested in 21 businesses across Eastern Europe and had 4 exits. The French entrepreneur believes entrepreneurs have an increasing role to play in shaping a meaningful world. He thinks success, in business, must come with responsibility. Profits with purpose. Growth with progress. Prosperity with philanthropy. Connect with Grégoire on Linkedin.