Startup culture has its own language. Many of the terms tossed around sounds like something out of a Sci-Fi movie, or an episode of ‘The Big Bang Theory’, at the very least…
In fact, hearing the language of startups is a lot like watching a foreigner that kind of speaks Spanish trying to have a go at Portuguese. Some words you almost recognize, others you get a sense of what they’re hinting at. But it really doesn’t amount to anything, if you’re looking for your native tongue.
The truth is, most of these terms have come to stay. So there’s really no use in trying to swim against the current and ignore them. The innovative businesses popping up every week, feed and bask in this new ‘lingo’, so, if you want to bring your organization closer to innovation and growth, you better start by understanding what promising startups are actually talking about.
So, to help you get started, here are some key jargon:
Incubator: A space for businesses to research, gestate, and grow before attempting to hit the market. Think about a species of animal that can stand as soon as it is born and then walk and jump 24 hours after. OK, so that is not the type of animal that belongs in an incubator. Incubators are good for seed stage companies, that really need more time and care. Incubators are often also coworking spaces.
Accelerator: An accelerator is much like an incubator, but with more access to resources, mentors, know-how, investors, and corporate connections. In an accelerator, a company might outgrow its natural pace, hence the ‘acceleration’. Accelerators are spaces that have the resources to help a startup fail and try again.
Pitch: A presentation in which a startup founder attempts to persuade an investor about the viability of their company. The presentation varies, based on the specific purpose of the pitch. Brief presentations in which an entrepreneur provides a 30 – 60-second overview of their idea, business model, and marketing strategy, with the purpose of attaining a followup audience with an investor are described as ‘elevator pitches’. Formal, detailed presentations utilizing power point type slide decks, with the specific objective of seeking investment from angel groups or VCs, are known as ‘investment pitches’, and usually, amount to 3 minutes.
Burn Rate: The rate at which a company spends net cash over a certain period, typically a month. Investors are not very keen in putting their money where the burn rate is excessive, apart from some few exceptions, like Uber. In simple words, its how fast startups are blowing the cash they got in the first place.
Seed Money: The first investments in a company by someone other than the founder. The term comes from planting a seed for the first time. This is the initial round of capital for start-up companies, typically provided by angel investors through preferred stock or convertible bond-type instruments.
Unicorn: A company that has magically been valued at over $1 billion (1 million millions). Curated fashion platform Farfetch, founded in Portugal, is one such example. It’s a steep road, but all startups dream of becoming Unicorns…
You are now ready to enter the world of startups. But tread lightly, it a chaotic space, constantly changing and evolving. If you need some guidance, Beta-i is always here to help you navigate the entrepreneurial ecosystem.