Startup Terms

24 Jan 2025

ROI

ROI (Return on Investment) is a financial performance metric used to evaluate the efficiency or profitability of an investment. It measures the gain or loss generated on an investment relative to its cost.

Outright Sale

An Outright Sale refers to a transaction where the ownership of a product, asset, or property is fully transferred from the seller to the buyer in exchange for a one-time payment. Once the sale is complete, the seller has no further claims or obligations related to the item sold, and the buyer has full rights over it.

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21 Jan 2025

R&D

R&D stands for Research and Development. It’s when companies innovate new products or improve existing ones. For instance, a tech company developing faster processors is investing in R&D

Key Man Risk

Key man risk is the risk your business faces if a critical team member leaves. For example, if your star developer resigns, it could impact operations. Pro tip: Share responsibilities across the team!

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14 Sept 2024

Bridge Round:

A short-term loan or financing round intended to provide capital until the next round of funding 💰.

Bootstrapping:

Building a startup using personal savings, revenue, or other non-investor funding, without external investment 💸.

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17 Sept 2024

Accelarator:

A program offering mentorship, resources, and sometimes funding to early-stage startups to help them grow rapidly.

Accredited investor:

An individual or entity meeting specific income or net worth criteria, allowed to invest in private securities.

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23 Jan 2025

Take Rate

The Take Rate is the percentage or portion of the transaction value that a platform or service provider retains as revenue. It is commonly used in marketplace or platform-based business models, such as e-commerce, ride-sharing, or food delivery services. For example, if a platform facilitates $1,000 in transactions (GMV) and retains $100 as its revenue, the take rate is 10%.

GMV

Gross Merchandise Value (GMV) refers to the total value of goods or services sold through a platform over a specific period of time, before deducting any fees, costs, or refunds. It is a key performance metric in e-commerce and marketplace businesses as it measures the overall volume of transactions.

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20 Jan 2025

WIPO

The World Intellectual Property Organization, or WIPO, is a global body that protects patents, trademarks, and copyrights. It helps ensure your ideas are legally safe worldwide!

Turnover

In business, turnover refers to the total revenue or sales generated by a company within a specific period, often a year. It indicates how much money the business has made from its core operations before deducting expenses.

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15 Sept 2024

Balance Sheet:

A financial statement showing a company's assets, liabilities, and shareholders' equity at a specific point in time.

Board of Directors:

A group of individuals elected to represent shareholders and oversee the management and strategic direction of a company.

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22 Jan 2025

Exit Strategy

An exit strategy refers to a planned approach by business owners, investors, or stakeholders to transition ownership or liquidate their stake in a business to achieve financial or personal objectives. It outlines how they intend to "exit" the business and realize returns, minimize losses, or retire.

Key Man Risk

Key man risk refers to the potential negative impact on a business if an essential individual (or "key person") leaves, becomes incapacitated, or dies. This individual is often critical to the business's operations, success, or relationships with clients, suppliers, or investors.

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13 Sept 2024

Alpha:

The initial version of a product, released to a limited audience for testing and feedback 🔤.

Beta:

The version of a product released to a broader audience for testing before the final release 📈.

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16 Sept 2024

Annual Recurring Revenue (ARR):

The amount of revenue a company expects to generate from customers on an annual basis.

Acquihire/ Acqui-hired:

The acquisition of a company primarily to hire its talented team rather than for its products or services.

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