Startup Terms to Know

AcceleratorStartup accelerators support early-stage, growth-driven companies through education, mentorship, and financing. Accelerators typically offer structured programs for a defined period of time.
Accredited InvestorAn individual or company that is able to purchase and trade securities which are not regulated by the SEC.
Angel InvestorAn angel investor is usually a high-net-worth individual who funds startups at the early stages, often with their own money.
Anti-dilution RightsAnti-dilution rights protect early investors in the event of a future decrease in the value of their shares. These rights issue additional shares to investors who invested at a higher valuation.
B CorpA certified B Corporation is a for-profit company that has third-party certification to verify that it voluntarily meets defined standards relating to the environment, social impact, accountability and transparency.
BootstrappingA company started with no outside investments.
Burn RateThe burn rate is a measure of negative cash flow. It is the rate at which a startup is spending its venture capital to finance overhead before generating positive cash flow.
Capacity BuildingStrategies designed to make businesses more adaptive in an ever-changing market.
Convertible NoteA convertible note is short-term debt that converts into equity and is used by investors to fund early-stage startups.
Churn RateThe annual rate at which customers stop subscribing to a service
Debt FinancingTo raise money by selling bond, bills, or notes to an investor with the promise that the debt will be repaid with interest.
Disruptive InnovationA new product or service that has the potential to replace, or displace, a conventional product or service.
Down RoundOften the result of a lowered valuation, a down round refers to a startup offering additional shares for sale at a lower price than in the previous financing round.
DragonA startup that raises $1 Billion+ in a single funding round
EcosystemA startup ecosystem is a group of people, companies, and related organizations that work as a system to create and scale new startups. Ecosystems form in limited geographic areas. The group draws together key actors and stakeholders that gravitate towards growth ventures, including entrepreneurs, mentors, incubators, sources of talent such as universities and corporations, investors and supporting services like startup-savvy law and accounting agencies.
Equity FinancingRaising capital by selling off shares of a company
Exit StrategyThe plan created by an investor, trader, venture capitalist, or business owner to end a partnership once a predetermined financial criterion has been met or exceeded.
First Mover Advantage (FMA)The competitive advantage gained by being first to market in a new product category
Flat RoundA round of financing that is closed at the same valuation as the prior round of financing.
Funding RoundThe stages of startup fund raising. Typically, the funding rounds are: Pre-Seed, Seed, Series A, Series B and Series C
Hockey Stick CurveHockey Stick growth refers to rapid revenue growth of a startup after a long period of linear growth.
Impact InvestingInvestments made with the intention to generate measurable social and environmental outcomes, in addition to a financial return.
IncubatorA startup incubator is a collaborative program to help entrepreneurs by providing workspace, seed funding, mentoring, and training with the goal of growing the businesses. Startup incubators are usually nonprofit organizations, often associated with universities and business schools.
Investor Swarming 
LeanThe development of a product or company based on the expressed desires of the market
Love MoneyMoney an entrepreneur receives from family and friends to launch business
Mezzanine FinancingFrequently associated with acquisitions and buyouts, this financing is a hybrid of debt and equity financing that gives the lender the right to convert to an equity interest in the company in case of default
Micro Venture CapitalSmall venture firms that invest in seed stage companies, and typically invest between $25K to $500K in a given company.
Minimum Viable ProductMinimum Viable Product or MVP is a new product that is introduced in the market in a basic format, with the goal of getting consumer feedback to develop the final product.
OPM (Other People’s Money)Capital from friends, family and early investors
Preferred StockPreferred stock rights help to minimize investor’s exposure to risk in future funding rounds. Sometime called Preferred Equity, these holdings allow investors to be first in line for payment in the case of a solvency event.
Pre-Seed Funding RoundEarly round of funding for initial startups. Often funds are raised from family, friends, the founder’s own resources, and occasionally, angel investors.
Private EquityA source of investment capital from high-net-worth individuals and firms.
Proof of Concept (POC)A demonstration of the viability of a company or potential product.
Pro-rata RightsThe opportunity given to a startup investor that allows them to maintain their initial level of ownership percentage during later financing rounds
Ramen ProfitableA profit margin that can cover basic operating expenses and staff salaries.
RunwayHow many months a startup business can operate before it runs out of money.
ScalabilityA company’s ability to grow based on their value proposition, repeatable business model, high growth, high margin, and distribution potential.
Seed Funding RoundOften the first round of outside funding for new startups. Funders are typically angel investors, targeted funds, accelerators, incubators, and venture capitalists. These funds typically finance research, key hires, product development and other initial startup activities.
Series A Funding RoundAt this stage, funding is often provided by a venture capitalist or angel investor and is based on real data from the operation of the startup.
Series B Funding RoundStartups at this stage of the funding process are often seeking capital expand operations
Series C Funding RoundStartups that reach this stage in the funding process are typically valued at 100 million dollars or more
UnicornA privately held start up with a value of more than 1 billion dollars
ValuationValuation is the amount that a startup is worth. This number is based on the amount that founders, investors, and shareholders decide that the company is worth, which is determined by the price per share that investors are willing to pay in order to invest in a startup during a particular round or stage.To calculate the value of an individual investor’s shares in a startup, multiply the number of shares the investor owns and the company’s current price per share.
Value PropositionA statement of what the business does, and how it is uniquely qualified to fill the need it addresses
Venture CapitalVenture capital firms or funds invest in early-stage companies in exchange for equity in the company.
Venture DebtA type of loan usually provided to startups that have already successfully completed several rounds of venture capital equity fundraisings. These companies have a history of operations, butThese do not have sufficient positive cash flows to be eligible to obtain conventional loans.