Welcome to the essential dictionary of #startuplife, busting the jargon from Acquihire to Zombie.
Love it or loathe it, this is the baffling tech vocab used to navigate and articulate an industry.
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Investment figures are often reported in US dollars, due to the longer tradition of US venture capital investing in digital tech companies, the fact that the biggest VC market is still in the US, and for ease of international comparison.
Fintech, Edtech, Adtech etc. These are tech industry subsectors, developing digital tech innovation with applications in Financial Services, Education and Advertising respectively. Other examples include Healthtech, Biotech, Agritech, Cleantech, Democratech, Insurtech, Lawtech and any other one you choose to create.
An incubator’s big brother. A cohort-based programme for scaling startups. Companies receive mentorship, learning, connections and investment aimed at helping them grow rapidly, in return for equity in the company. 🚀
The process of acquiring a company for the purpose of hiring the team behind it. Key personnel may be tied in for a period of time after acquisition.
A project management framework that allows for flex in scope and resources, and product iteration.
An Angel investor is a person of high-net-worth who invests their personal wealth in early-stage businesses either individually or as part of a syndicate. An Angel round is a fund raise from one or more Angel investors, usually anywhere between $10,000 and $1m. 👼
Artificial Intelligence describes systems that can accomplish complex goals autonomously and through learning by experience. Find out more in our Guide to AI > 🤖
Business As Usual. The day-in, day-out work that is unrelated to a particular project. Used when accounting for time and assessing how to resource a project with people, BAU time will include any regular meetings, un-project related admin, line management and other responsibilities.
Even sharper than the cutting edge. Used to describe work at the global vanguard of technology. Maybe experimental. Maybe game changing. Maybe overstated. 🔪
Cryptographically-secured distributed ledger technology, used to create verified open transaction logs. Initially created by the person or group “Satoshi Nakamoto” in 2008 to enable peer-to-peer cryptocurrency exchange, solving the problem of double spending without the need for a middle man. Despite development still being in its relative infancy, subsequent applications of Blockchain have been vast, covering everything from supply chain provenance and intellectual property (IP) protection, to gaming. ⛓
Keeping costs low and using personal investment and/or revenue to fuel company growth. Bootstrapped companies choose to grow organically and independently rather than take external investment, meaning they’re likely to become revenue generating sooner rather than later. It doesn’t mean you won’t end up as a major player though; Mailchimp, GitHub and GoPro were all bootstrapped. 👢
Net monthly loss. Usually used to refer to venture-backed companies running a (deliberate) loss in order to achieve market share growth, the burn rate is how quickly they’re spending the money. 🔥
Buying the logo
When an investor buys a small amount of a big name startup, usually in a later round or at high valuation in order to have recognisable names in their portfolio and attract new opportunities.
Short for capitalisation table. A document listing a company’s equity shareholders, with details of who owns equity in the business, how many shares they own, the types of shares they own, and the combined total company valuation at the last point of investment.
The fixed meetings of an agile project team, usually consisting of daily standups, as well as a planning session, review and retrospective, recurring over a fixed period, often every two weeks. These form the structure for the team’s work timetable. Also sometimes referred to as rituals.
Sort of the opposite of Impact Investing, some founders will be mindful not to take investment from say petrochemicals, munitions, the sovereign wealth funds of countries with poor Human Rights records, or really anything else you wouldn’t want to tell your Mum about. Instead they’ll look for Conscious Capital.
An asset issued during an early-stage investment round, instead of shares, as a means of delaying the determination of company valuation. It acts as a loan with the intention of being repaid in equity, usually with certain discount conditions at the next investment round, in acknowledgement of the higher risk of the early investors.
A shared, serviced office. Once a necessity for startups to keep costs down and convene fledgling tech scenes, now increasingly aspirational, expensive, Airspace corporates. Oh but it comes with free *insert benefit gimmick*. 🍺
Raising money for a project or venture through small investments from a large number of people, facilitated by crowdfunding platforms such as Crowdcube, Seedrs or Kickstarter. Crowdfunding can be a good way of creating an audience buzz for your project, as well as raising capital.
Cyber security refers to the protection of computer networks, data and programs, with the intention to deny any unauthorised access and prevent malicious attacks. Explore our cyber security glossary and understand your deepfakes from your wabbits.
Innovation that creates a new market, upsetting and driving change in market status quo, first used in this context in 1995 by academic Clayton M. Christensen. E.g. Airbnb created a market for short-term peer-to-peer holiday lets that was previously almost non-existent; their marketplace eventually impacted the incumbent hotel industry.
Dodfooding or “eating your own dog food”, is the process of using your own product. Teams will do it to catch bugs, iron out user experience issues, and to prove the product’s value. E.g. Trello, a team and work organising application, manage all the work of their distributed team on Trello. 🐶
A funding round where the company valuation is lower than at the last time they raised. It either means the company is less valuable than it was before, or that it was previously overvalued. Either way it’s not great.
Eat their lunch
To take another company’s market share or planned market share, by beating to market, growing quicker, having more resources or better execution. 🥪
The entrepreneurs, talent, startups, scaleups, corporates, investors, support organisations, academic institutions and government players operating in a sector whose interaction lead to the creation and growth of new companies. A startup ecosystem needs as many of these players as possible in the same physical or virtual space in order to thrive.
A brief overview positioning statement about your business. The idea being if you get in a lift with someone important you can convince them of your company’s value proposition in the time it takes them to get to their floor. Always have it ready.
The OED describes an entrepreneur as: “a person who sets up a business or businesses, taking on financial risks in the hope of profit.”
The point at which a company ceases to be an independent privately-owned venture, either because the company is acquired by or merges with another (see M&A) or because it becomes publicly tradable after a float on the stock exchange (see IPO). This is the point at which investors will be able to liquidate their investment position, and realise the returns that they invested for. 👋
Part of a tech sector job title, denoting senior expertise in a niche or emerging area, with responsibilities including spreading the good word about their subject matter, internally and/or externally. Prefixes include Brand, Tech, Data, Change and Chief.
Friends and family round
Very early startup investment raised from people in the founders’ personal network.
F*ck You Money
When you make so much money at a startup exit that you can do whatever you want. When you can say FU to anyone or any offer and it doesn’t matter.
A company valued at $250m-$800m, and therefore with realistic potential to achieve unicorn status in the near future. Because ‘future unicorn’ was not jargony enough. 🐴
Digital marketing with some business development and product development thrown in. In early-stage startups people have to wear many hats, and customer acquisition is key, leading to the emergence of growth hacking as a discipline.
A company growth curve that ramps up exponentially in the shape of a hockey stick, and because it’s American, think ice hockey rather than field. These ‘rocket ship’ high-growth businesses are the ones investors are looking to find and jump on board with, the ones that can have huge impact and go global, quick. See also, scaleup. 🏒
Office organisation without fixed assigned desks. Companies can save on overheads by having fewer desks than people on the assumption that at no point will everyone be in the office. Some studies suggest it increases sick leave though.. 🤒
An early-stage startup support system, offering guidance, training and often office space. Support may be offered for free by non-profits or universities, or can be on a for-profit basis in return for a fee or company equity. 🐣
An inside entrepreneur. A person in a large organisation who uses entrepreneurial skills to promote innovation in product development and marketing.
Initial Coin Offering. A means of crowdfunding a blockchain project. Investors are sold crypto “tokens” or “coins” in return for their investment of fiat money or other cryptocurrencies such as Bitcoin or Ethereum.
Initial Public Offering. When a company offers stock for public sale on a stock exchange for the first time. The company will now be a publicly-traded company. It is a form of startup exit.
To continuously improve and update a product in the development cycle. Startups tend to aim for rapid iteration, with development priorities based on feedback, and judgements of importance, resources and opportunity cost. Each cycle of feature prioritisation, development, release and feedback is an iteration. Repeat ad infinitum, or until the money runs out.
A method of agile work to capacity task allocation, whereby tasks are “pulled” by workers when they have availability, rather than having work assigned to them to be completed by a particular deadline. Kanban can improve the efficiency of work distribution and increase delivery. Work is often visualised and organised on a Kanban board, where tasks are listed in columns relating to progress status.
Key Performance Indicators; measurable values that demonstrate how effectively a company is achieving key business objectives, and help to focus work to the business strategy. Here’s our guide on how to set your KPIs >
Nothing to do with an Italian bell tower. Lean is a startup methodology developed from Japanese manufacturing systems and popularised by Eric Ries, setting out a framework for creating a minimum viable digital product (see MVP) in order to test with market (see Product Market Fit), and continuously develop (see Iterate) in order to keep costs down, reduce time to market and create better products. Also responsible for a lot of secondary jargon (see above).
The payout order at a liquidation event. Basically who gets paid in what order. Often investors will have payout priority over other shareholders through liquidation preference clauses.
Low hanging fruit
Just say “quick win”, don’t be that guy. 🍊
Mergers and Acquisitions. When a company is acquired by or merges with another. Major shareholders may have their shares bought out, acting as a form of exit for founders and early shareholders, when they cash out their value gains for the first time.
A moat or economic moat is any competitive advantage that a company has over its competitors that makes the business “defensible”, i.e. an advantage that cannot be easily replicated by others. This could be intellectual property, or even a strong community built around your brand.
A highly ambitious and innovative tech project of very high risk and potentially very high reward. The term used in this context was created by Google, with their “moonshot factory” X aiming to create businesses that addresses a huge problem, proposes a radical solution, and uses breakthrough technology.
Minimum Viable Product. The most basic version of your product vision that will meet basic requirements and satisfy your first users. From there, you iterate.
Annoying words to describe great talent. Often used as job titles or in job descriptions e.g. “Front-end Ninja”. Increasingly being rejected and fazed out as exclusionary and clichéd. 🎸
The opposite of a ninja. Comes from Newbie; derogatory. In gaming or tech a noob is someone who is new to the topic or scene and are naive due to lack of experience. Sometimes they are ridiculed or their ignorance may be taken advantage of.
A staple of scaleup job descriptions. An offsite is when time is taken out of the normal work schedule to get out of the office(s) and convene a team or whole organisation elsewhere. The change of scene can provide perspective on day-to-day activities, allow time for refocussing or re-strategising, and can be a time for team celebrations and bonding.
Objectives and Key Results. An employee goals system created by Google to ensure effort is all directed towards the same strategic business goals.
What the rest of Financial Services call the type of investing that VCs do, that may be illiquid and might not see returns for a number of years, i.e. you have to be patient. Patient Capital may be offered by traditional Private Equity (PE) funds, or government-backed provisions such as the British Business Bank, in addition to VCs.
Pay it forward
Not a tech-specific term, but a popular one. As wikipedia says it’s a term “describing the beneficiary of a good deed repaying it to others instead of to the original benefactor.” In tech it usually takes a lot of hard work, good fortune and help from others in order to succeed, so when you do, using your position, knowledge or improved circumstance to help those coming behind is an acknowledgement of that. Those in tech also often have a belief of the industry’s potential to change the world, and having a hand in passing on useful help is of general interest.
Also just “deck”. A slide presentation that can communicate your business and business plan to prospective partners and investors. If you don’t know where to start, try the 30/20/10 rule. No more than 10 slides, 20 minutes, and no smaller than 30 point text.
A significant change of direction in a business’s strategy or offering, in reaction to changes in the competitive landscape, consumer demographics and adoption, or because a better opportunity materialises. E.g. Twitter started as a podcast distribution platform called Odeo, and pivoted when they couldn’t compete with iTunes, and Youtube was once a video dating platform with the tagline “tune in, hook up” before a pivot. ⏎
Defined by prominent VC Marc Andreesen, “Product/market fit means being in a good market with a product that can satisfy that market.”
Proof of concept
The successful piloting of an idea with a proposed market, gathering evidence than a project could be successful if launched in its full form, and providing enough encouragement to move forward and commit more resource.
Coined by Paul Graham, co-founder of accelerator Y Combinator, a company is Ramen Profitable when it’s making just enough money to cover the founders’ basic living expenses. 🍜
The amount of time until you run out of money. Startups that raise investment will plan to spend it at a particular rate. Taking into account any revenue they’re generating (if any), they will know when they will be due to run out, and therefore when they need to raise again. ✈️
A scaleup is a company at a distinct phase of growth. The company has now outgrown the early startup years, and is demonstrating high-growth and big potential. These are the companies that investors are looking to invest in, and that can go on to create a lot of jobs. The OECD defines high-growth as a company that has achieved growth of 20% or more in either employment or turnover year-on-year for at least two years, and have a minimum employee count of 10 at the start of the observation period. More on Scaleups here >
A facilitator for an agile development team. They help the team to reach consensus for what can be achieved during a specific period of time, and solve challenges and blockers impeding progress. They’re also crucial for time management and team morale.
The first formal equity investment in an early-stage company from industry investors such as Angels and VCs to fuel growth. Usually under $2m. If a company is “seed-stage”, they have raised this round of investment. If they are “pre-seed”, they’ve not raised this round of investment but are planning to do so. 🌱
This is the first scaleup investment round, for when a company has found product/market fit and is looking to ramp up operations and adoption. More than just a startup idea, the company will have strong traction and growth metrics, and a clear growth strategy. Usually raising somewhere in the region of $2m-$15m, the capital will provide 6-24 months of growth runway. Subsequent VC funding rounds will be named alphabetically as they increase in value, i.e. Series B, Series C, etc. 🚀
Search Engine Optimisation. Creating and editing website content, and honing technical aspects of a website in order to maximise your website’s visibility on search engines for relevant audience queries.
A workplace instant messaging and collaboration application favoured by tech companies. Slack has now also done a Google though, transitioning from brand name to verb. I slacked them. They slacked me. Can you slack it to me?
Originally meaning institutional capital investors with a good track record of success, whose investments could therefore be expected to see a higher returns due to good judgement. In tech it now also suggests investors with subject matter expertise as well as a strong track record, that can add value to a company beyond just the money they bring. Their strategic advice, connections and portfolio networks may be attractive to companies as other tools in accelerating their growth.
A brief, daily check-in meeting for agile teams, of no more than 10 minutes, used to discuss challenges and blockers to planned work. The idea is that if you take the meeting with everyone standing up it will limit the length of the meeting.
A young business venture, under about 5 years old, with innovation at the core of their product or service offering, and plans to rapidly scale. Their business model often aims to be disruptive to incumbent sectors. Startups often share cultural similarities in working practices, conventions and ambition.
A startup operating under the radar, keeping their key propositions secret before an official launch so as not to alert competitors. Also used to pique interest, or signal that investment has been raised, which may or may not be true. 🕵️♂️
A gender-neutral variant on a straw man proposition. This is the name given to a draft idea, created for the purpose of sparking discussion that will lead to the creation or refinement of new, better ideas. The theory is that a straw dog can be safely attacked, and later fleshed out. 🐶
Science, Technology, Engineering and Maths. Often spoken about in relation to talent and skills gaps in the tech industry, and education deficits. Increasingly Arts is added to create STEAM, in order to demonstrate the business importance of the intersection of Arts and STEM subjects.
Tech for good
Used to describe a tech company with a focus on social impact. It is increasingly understood that pursuing purpose and profit in business is not a zero-sum game, and the UK’s leading the way. ♻️
The agreement between an investor and startup setting out the conditions of an investment deal. May cover aspects of valuation, share type (will investor have voting rights), board rights (will the investor sit on the board of directors), participation rights (option to participate in future investment rounds), redemption rights (a time period after which the company must repurchase the shares), and liquidation preferences (how proceeds of a liquidation event are distributed, and who gets paid in what order).
Another word for a group of people, but favoured by the tech industry. Other words for groups include “circles”, for intimate closed-room communities, or “cohorts”, for a group of companies or company founders who take part of the same accelerator or growth programme intake.
Two Pizza Rule
Amazon founder Jeff Bezos’s way of limiting meeting size. If there are more people in the room than can be fed by two pizzas, nothing will get done. 🍕
Coined by VC investor Aileen Lee in 2013, a unicorn is a privately-owned tech company valued at over a billion dollars, so called for their mythical rarity. A decacorn is a company valued at $10bn. Read more about the history of “unicorn” > 🦄
Unique Selling Point. The secret sauce that differentiates you from your competitors.
How you present and sell your product to prospective customers, demonstrating how they will benefit from adopting what you’re offering. Your value proposition is an important part of the brand communication, setting out what the company stands for, they type of company it is, its aims and motivations. It should communicate the Unique Selling Point (see USP) of the company, and why it’s so valuable.
Venture Capital (VC)
A form of private equity with a focus on making long-term investments in high-growth-potential startups and scaleups, with an understanding of high levels of risk but also high reward. With a strong sector focus, often Venture Capitalists (also VC) and VC funds offer “value add” beyond the financial investment, in the form of network, insight and expertise. 💰
An objectively terrible word, but people do use it, meaning someone who is an aspiring founder. Particularly used ironically for those who will never realise their ambition.
Working from home. 🏡
As in 10x, 100x. Pronounced “ex”, and used to refer to how many times over something, usually a startup or crypto token, has increased in value. If it’s increased 10 fold, you don’t say 10 fold, 10 times, or 1000%, in tech you say 10x. 📈
The X of Y
The Uber of haircuts. The Netflix of coffee. The X of Y. A reductive startup descriptor. Started off useful and a way of creating buzz. Now a cliché.
When a startup stops growing significantly, but is turning over enough to keep going. Investors are unlikely to see their returns, and the lack of progress leads to a brain drain, hence zombie. 🧟♀️