Glossary of Start-up Terms

A parallel test used to identify what kind of actions could optimize different metrics.  In this test, variables such as: call to action or copy can be included

An accelerator is a program that aims to promote the development of start-ups, which at the very least must have a business canvas, or a business plan developed.

Accessibility focuses primarily on the ease of access to different pages or functions of an app or web page.

It is a process performed by accountants, which consists of contextualizing each transaction to obtain an accurate picture of a company's financial situation. 

Startup that is acquired by its own workforce.

Term to refer to the purchase of a small company by a generally larger one.

Refers to the moment when a company gains a new customer.

Describe the item or answer the question so that site visitors who are interested get more information. You can emphasize this text with bullets, italics or bold, and add links.

Metric that allows you to know the rate of users (%) who have performed specific actions to extract value from your product. An example could be the number of accounts followed per user in a social app.

It consists of attracting the public's attention to a product or business, using paid advertisements in different types of media. Generally, this is achieved using print, audiovisual or electronic media.

It is an individual who, in exchange for a small percentage of equity stake, offers advice and networking to a developing company.

Method that allows you to set clear organizational tasks and requirements. This allows for the continuous development of solutions, in addition to speeding up the decision-making process. 

It is a term used to refer to entrepreneurship applied in the agricultural sector.

Term to refer to the size of the round reserved for an investor, investment fund or group of investors. Generally, it is reported in a currency value. 

Refers to the use of Alpha tests to perform an internal launch of the product before launching it to the public. This allows the company to detect critical failures, showstopper bugs or possible improvements that could be made.

Service provided by Amazon, which allows start-ups to rent cloud space and tools. That way, start-ups don't have to invest large amounts of money in buying those things.

Analytics produced by a domain host, search engine or any other 3rd party that analyzes web traffic to produce web vitals.

Wealthy investor that provides capital and financial support to a fledgling start-up. In exchange, the investor receives an interest in the start-up via common, preferred shares or other financial instruments. The regulations varies by country but typically angels are accredited investors. 

It is an organization of investors who pool their expertise, resources and capital to make angel investments. There are a myriad of them from as small as a few to hundreds or thousands of members in the group. They are typically organized by geography. 

It is an investment round intended only for angel investors, which is usually carried out after the round intended for friends and family of the company founders.

ACV (annual contract value) is a metric that shows the value of an ongoing customer contract by averaging its value over an entire year. This metric is very useful for measuring the dollar value of monthly subscriptions, payment plans or multi-year contracts by customers.

This is the amount of revenue that companies receive from subscriptions to a program or service for an entire year.

This clause is designed to protect the investor, as it prevents his ownership percentage from being reduced during fundraising rounds.

An API is a software that allows two or more applications to communicate, so that the applications can work together.

It is the estimate of the value of something in the public market. It also describes how the estimate of that value was arrived at.

These are documents filed with the Secretary or Registrars (in Canada or USA), which document the establishment and indicate the existence of a corporation. These types of documents usually include the name of the company, the address and a statement of business purpose, among other types of information. The articles of incorporation also define the various share classes and the associated terms for the corporation.

An attribution model allows you to determine how credit for conversions or sales is assigned to user touch points.

The number of customers lost in a period of time. It is typically expressed as a percentage. 

The maximum amount of shares a company can issue.  This number is decided by its Board of Directors.

ARPA is a way of measuring the amount of revenue generated per account, usually per year or month. This metric allows to analyze how much revenue has been generated by a company and the growth of the business, something that allows investors to know which products generate more revenue and which ones generate less. 

Commercial interaction of one business with another. 

Commercial interaction of a business directly with its customers.

An e-commerce business model, which consists of a company partnering with a commercial customer to sell jointly to an end consumer. A clear example is Amazon.

This is the part of the application that cannot be accessed by the user, and is responsible for the maintenance and development of the app.

A collection of processes, procedures and activities that are typically not visible to customers but are essential for the effective functioning of the Front Office and the overall organization.

Refers to the direct exchange of goods or services between companies.

Beta testing occurs after the Alpha release. In Betas, a small group of potential customers are invited to participate. They are the first to test a new product, service, or a function release before it is offered to the broader customer base in exchange for feedback on the beta release.

It is the giant panoramic vision of an entrepreneur who founded a start-up and seeks to change the world. Typically, the greater the BHAG, the more likely that a VC firm would be interested in exploring the idea.

These are the amounts of invoices billed to customers. This can be for a given period of time, such as a month or a full year. This metric provides insights into the state of a business, because that is the money your customers owe you.

A process that deletes identifying data, such as name, gender or company name, from an app. This has the benefit of removing bias.

A group of people elected by the shareholders of a company to make governance decisions over the company. The primary role of the Board of Directors is to guide the decision of the company in terms of strategy, risks, opportunities and so forth while protecting the interests of the shareholders. The Board appoints the CEO and CAE.

Term used to refer to a start-up started only with funds from the founder(s). About 80% of start-ups start this way.

Metric that indicates the percentage of users that visit a page and leave almost immediately upon landing on the page. The lower the bounce rate, the better.

Term used to refer to the period of time during which an industry does not realize that it may be overvalued and overinflated.

A term used to refer to the rate at which a company spends money compared to the capital it owns, over a period of time. Typically, over a month. Expressed as $X/month.

Business advisors are investors, serial entrepreneurs or experts in a particular subject, who offer advice to companies to boost their development. In return they may receive money, although most commonly they also accept shares in the company.

Concept that refers to the work of partnership development and strategic planning of a start-up, among other tasks. Typically, business development is carried out by non-technical founders with support from the technical founder.

A term that describes how a company or business plans to be successful, make profits and create value for its customers.

It is a scheme that attempts to identify the main points of a business in a diagram. It has 9 key components: Key Partners, Key Activities, Primary Resources, Customer Segments, Client Relationships, Value Propositions, Cost Structure, Channels and Revenue Streams.

A business incubator provides support and workspace services to emerging businesses and entrepreneurs.

Program focused on encouraging entrepreneurs to develop business plans. Typically, it is presented in a pitch competition format, in which companies seeking financing participate. It is an important way to drive awareness and earn cash or in-kind prizes.

A statement that reflects the financial status of a company at a specific point in time. It comprises three main categories: assets (current and long-term), liabilities (current and long-term) and shareholder equity.

It is the process of recording all transactions of a company in an accounting software.

Short-term loan, typically with a maturity of weeks or months. It is an instrument used by start-ups that are running out of capital and have not yet secured their next round of funding. It could carry negative connotations for companies.

Refer to the valuation of a company's tangible (e.g. cash, buildings, equipment, etc.) and intangible (e.g. patents, contracts, customer lists, partnerships, etc.) assets.

Term that refers to the complete acquisition of a company or the acquisition of the majority participation in its shares, by a group of people or another company. Typically carried out by Private Equity firms or competitors when executing on a roll-up or value chain consolidation strategies.

Cap is an abbreviation of market capitalization, which is the value of a company on the open market (typically public exchanges). This differs from an Enterprise Value which comprises the entire value of the company.

Document that describes the capital structure of a company. It is generally used to find out the percentage of a company owned by each investor. A key to getting an investment is to keep the cap table up to date and unencumbered.

Document that describes the capital structure of a company. It is generally accompanied by the Cap Table. 

Percentage of the earnings generated by an investment, which an investment manager keeps as compensation for his work. It is an essential term in the VC world. The carry is agreed upon the General Partner (GP) and the Limited Partners (LPs).

It is the amount of money that flows through the business, both in and out.

A cash flow statement allows linking the opening cash balance with the closing cash balance, showing in detail the sources of income and the uses to which the company's cash has been put.

It is the gap that exists between customers who trust a little-known start-up, product or service, usually called believers, and the rest. Many companies are successful in capturing believers but fail in capturing the rest of the market. The term was popularized by Geoffrey Moore in his Crossing the Chasm book.

An officer of the company appointed by the Board of Directors to guide the company in terms of risks and controls. Compliance typically sits with the CAE, although it is not uncommon to have a stand-alone Chief Compliance Officer (CCO) especially with more mature or with companies in highly regulated industries like financial services.

An officer of the company appointed by the Board of Directors to guide the company. S/he is the most senior officer of the company and typically also sits on the Board of Directors. 

This is the name given to the person in charge of designing the strategies for a company's products. Among other things, his functions include planning the features that a product offers. 

The rate at which a customer stops doing business with a company. It is the opposite of retention rate.

Period of time stock option holders (founders, employees, advisors, directors, etc.) must wait before a percentage of the stock option grant can be exercised.

A calculation that allows investors to know the periodic growth of a business over a given period of time. To do so, it is necessary to follow the following formula: (Latest Month/ First Month)(1/# of Months) -1.

Terms used refer to a form of equity ownership in a company. Individuals who own common stocks typically have the right to vote in corporate decisions. However, in liquidity events their rights are subrogated to the rights of Preferred Shareholders.

Commercialization is the process by which a product of a company is released to the market. Commercialization is also a very important concept when accounting for R&D and applying for government assistance. Often measured by Technology Readiness Level (TRL)

It is an aspect in which a start-up differs or stands out from other similar ones. A competitive advantage can help make it more difficult for other businesses to imitate a particular start-up’s model. Often described as moat (i.e. what is your moat around the castle).

Ability of programs to perform several tasks at the same time. This increases efficiency and speed of work.

Concentration risk is the possibility of an investment portfolio or financial institution losing value. This is something that usually occurs when an individual or a group of exposures moves in an unfavorable direction. Concentration risk can lead to irreparable losses. Generally, the investment portfolio ends up being liquidated or the institution declares bankruptcy. 

Marketing method that consists of both distributors and consumers purchase the product.

This form of marketing uses the creation and distribution of content to generate interest in a product or service, without directly promoting it. Quite often associated with Search Engine Optimization (SEO).

These are products designed to be purchased by end consumers.

The number of potential customers that convert to actual customers via a specific Call-to-Action (CTA).

Also known as convertible debt, it is a debt instrument generally used by angel or seed investors seeking to finance an early-stage start-up that has not yet been explicitly valued.  The conversion feature is designed to convert preferred shares into common shares at the achievement of a set of criteria and at the discretion of the debt holder.

These are preferred shares issued by a company, which can be converted by the holder into common shares at a pre-agreed value.

The process of making changes that improve a website or application and increase the percentage of users who perform a given action. This action can be filling out a form or subscribing to a newsletter, among others.

Copyright is the exclusive right that the owner of an intellectual property has over an artistic, literary or scientific work. Copyrights, trademarks and patents are regulated on a country-by-country level and in order for a company to preserve its rights to their intellectual property, they need to file for protection in all of the countries that they currently operate and or plan to operate to reduce the risk of someone else infringing on their rights.

A type of investment from a corporation, which is often accompanied by valuable industry insights and strategic advice to drive the development of a company. This can take many different forms: a separate department in a company or a stand-alone company as part of the same group of companies.

In other cases, where the R&D costs are high, competitors in the same industry stand up a VC firm to invest in start-up ideas to advance the industry forward and share the risk amongst the corporations participating in the VC firm as LPs. It is also quite common for Corporations to team up with established accelerators.

Strategic investment made by one corporation in another that is in the early stages of development.

It is an entity that has a charter that allows it to be recognized as a legal entity with its own rights, privileges and liabilities, which are distinct from those of its members. It is an entity that has a charter that allows it to be recognized as a legal entity with its own rights, privileges and liabilities, which are distinct from those of its members. 

Term used for businesses that are not likely to scale dramatically, but may be successful, nonetheless. They are not usually chosen by Venture Capitalists to invest in them.

An office space, popularized in the last 10 years, where a company has a small office, but all the common areas and resources are shared among all the companies occupying the floor or the building that they are in.

A practice that allows businesses to raise funds from regular people, rather than waiting for larger investors. There are some sites, such as Kickstarter, that specialize in crowdfunding.

A term that refers to getting input from a large number of people, usually free of charge, for a particular task or project.

Acronym for create, read, update and delete. It is an application that allows entering and obtaining data from a particular database, in different ways.

Process that has 4 stages and directly involves potential customers. The 4 phases are Customer Discovery, Customer Validation, Customer Creation and Scale Company, and this process is very important to design products focused on users.

Customer discovery is the first phase of the Customer Development process, and it consists of finding the ideal customer for your product. That way, you can create the perfect product for him. This is the most important, yet underappreciated work, for a start-up. Before laying a single line of code, a start-up should have a really good understanding of who their customer is and what their must-address (painkiller) and nice-to-address needs (vitamin).

Metric that allows a company to know how much money it incurs to obtain a new client. It is not only useful for companies, but also for investors, since it allows them to analyze whether it makes sense or not to invest in a company. LTV has to exceed CAC and investors generally have a rule for what that ratio should look like. Most commonly it is in the range 3:1 or 4:1. If it smaller, then the cost to acquire a customer is too high and the company needs to devise a plan to lower the CAC. If the ratio is too high, then the company is not maximizing its growth velocity.

Term that refers to the total net profit generated from a product or service over the lifetime with a particular customer.

Process performed by software to manage relationships with a company's customers. Among other things, it involves the automation of procedures such as email marketing campaigns.

DBA stands for Doing Business As. DBA registration allows a person to conduct business under a name that is not their own or that of their organization. It may be required by different entities. For example, banks require a DBA registration to open a business bank account.

Total number of users interacting in some way with a web or mobile product on a specific day. Generally, users simply have to view or open the product to be considered active.  It is one of the key metrics for web and mobile application development companies.

A database is a place where all the data that a company needs for its processes is stored, as well as various statistics.

Online deposit used to store different types of documents, mainly those related to financing rounds.

The pipeline of opportunities that an investment firm (be it a VC, PE or a Family Office) is evaluating to determine whether to make an investment. Maintaining a healthy deal flow is of paramount importance. In VC situations, the more junior resources, typically carrying titles like Principal, are primarily responsible for deal flow. General Partners are typically the ones making the investment decisions.

The dead lead is the investor or investment group in charge of organizing an investment round for a company. S/he is generally the person who makes the largest investment within the round, defines the Term Sheet and serves as a link between the company and other investors.

Debt is borrowed money, which must be repaid. Generally, the entrepreneur who takes out a loan agrees to pay interest for the duration stipulated for the loan. There are myriads of debt instruments, but they can be generally classified as: i) government debt, typically interest free; ii) commercial, coming from traditional lenders like banks; and 3) venture debt, typically coming from PE firms or similar type organizations. 

Term to refer to the money or capital obtained by a company through loans.

A very common financial metric employed by more traditional financial institutions to measure the relative proportion of shareholders' equity and debt used to finance a company's assets. It is an indication for how leveraged a company is (i.e. how much is it relying on borrowed capital). This ratio is closely evaluated with the ability of a company to service its debt.

Deferred revenue are the anticipated payments received by a company for products or services to be delivered or rendered in the future. Deferred revenue are recorded as a liability on the company's balance sheet. 

Public pitch events in which start-ups that are coming out of an accelerator program have between 5 and 15 minutes to present their value proposition to investors.

Practice that combines software development and IT operations. The main benefit it offers is an increase in the speed and efficiency of program or product development cycles.

The dilution of an investor's shares consists of a reduction in its percentage, due to successive investment rounds or the appearance of new advisors.

A discount on a convertible note establishes a reduction, expressed as a percentage, at which the convertible note will be converted in the next round of investments. For example, a discount of 20, will allow a preferred shareholder to convert their preferred shares into common stock at a discount of 20% from the valuation at a point in time. A number of other criteria has to be satisfied for that to occur and this is well documented in the term sheet or notes.

A characteristic that not all start-ups have. It refers to the creation of products that generate a great impact in the market, mainly thanks to a high level of innovation. Commonly referred to as the innovation that a company can introduce into existing industries or the path that it can blaze in the formation of new industries. The more disruptive a company is, especially if it has know-how that affords it protection from competitors, the more attractive the company is for an investment.

A term used in a multilevel marketing business for the people below an individual who receive payment for each sale.

Investment round in which the shares of a company have a lower value than in previous rounds.

Term used to refer to the right of the owners of a certain percentage of a company's shares to require other shareholders to sell their shares or not to oppose the sale of a company.

Term used to refer to start-ups that manage to raise $1 billion in a single round of financing. There are only a few dragon start-ups. Some examples include AirBnB, Tumblr and Uber.

An investigation process that allows for accurate disclosure of various documents or materials that may influence the outcome of a transaction. Companies are well advised to maintain a data room and continuously update the documentation that is included there. 

Fiduciary duty of a Board of Directors, which consists of possessing as much relevant information as possible and taking it into account before making a business decision. Directors could be liable for not exercising adequate duty of care. Some of this risk could be mitigated through Officers and Directors Liability insurance.

Fiduciary duty of the members of the Board of Directors, which consists of always putting the interests of the shareholders before their own.

Term used to refer to a person who adopts a product or service before everyone else and is proactively acting as an evangelist or advocate for the product. A very important group of customers for early stage companies.

Abbreviation for "Earnings Before Interest, Taxes, Depreciation, and Amortization." Allows a clearer view of a company's cash flow.

The cost benefits that a company can obtain by ramping up its production. An example might be when the cost per unit decreases due to increased production levels. The abilities to spread the Fixed Costs over a greater number of units leading to the reduction of the overall cost per unit. A key driver behind M&A activities in order to drive synergies.

A term that refers to the focus of a business on sustainable operations, which allow it to take care of the environment. 

Term that refers to an interconnected environment, where all companies and entrepreneurs support each other to achieve development.

Government programs designed to help young, high-risk companies raise finance.  It consists of offering tax breaks to investors who support these types of companies. In some countries, they are known as investment tax credits. In Canada and the USA, they vary on a province-by-province and state-by-state level.

Products designed to be used by other companies, typically large enterprises (companies with 1,000 or more employees).

Term that refers to the degree of ownership of a company or asset by an investor or group of investors. It is expressed as a percentage.

Capital that a company receives from investors in exchange for a percentage of shares or ownership of the company.

Concept that refers to generating capital by requesting small investments from numerous people, generally in exchange for a small portion of equity within the company. It allows for non-accredited investors to take ownership in a company. Regulations vary on a regional and country level.

It occurs when an entrepreneur sells a part of his company to an investor, so that both can share both the profits and the losses. Typically occurs right after the FFF and/or Angel round.

A term used to refer to Financial Technology companies that are introducing innovation, new technology and new processes to the financial services sector.

Funding typically provided by an existing investor in a company. PE and VC firms reserve some of the money in their funds for follow-on investments. It is when the existing vendors do not have the resources or the desire to make a follow-on investment that a company has to go out and secure a Bridge Loan.

Form to be completed by the members of a partnership to explain to the IRS the income that each member has received. 

A founder is a person who has had the idea of forming his or her own company and has succeeded in bringing it to fruition.

Number of common shares of a company owned by one or more of its founders.

It is an annual tax that must be paid for carrying on a company as a separate legal person.

The money that remains in the business after paying taxes and expenditures. It is an important liquidity metric when evaluating a company’s financial position.

A revenue model that includes a Free (product or service offering) and a Paid or a Premium offering. The Free offering is used as a beachhead to get customers to try a particular product or service. It provides limited value and is intended to move customers up from Free to Premium.

First round of investment in a company, during which family and friends of the founders make contributions of money so that the startup can continue to carry out its operations.

Capital that a company, still in its early stage, receives from family, friends and fools. Referred as such because of the high risk associated with such investment. Sometimes referred to as Love Money. 

The front end is the part of a web page or application that a user can see, and interact with.

A collection of processes, procedures and activities that are typically visible to customers. Typically includes: sales, marketing, customer success and so forth. The effective functioning of the Front Office is enabled by the Back Office.

The total number of shares of a company's common stock that will circulate in the open market after all possible sources of conversion, such as employee stock options, are exercised.

A platform, usually a website, that facilitates investments in private companies.

A process that allows a company to generate capital through the exchange of equity for cash.

The process of adding game mechanics to a web page or app. This is done in order to encourage users to participate and eventually perform a certain action

An organizational structure jointly managed by partners, who share the profits and losses produced.

The general partner is in charge of managing the private equity funds. This function is carried out by a PE firm.

When a company decides to go public, it means that its shares are available for purchase in the public market through an initial public offering (IPO).

Step-by-step planning to successfully launch a product or service to the market.

Money that is provided to a company by a governmental or other organization. It does not require repayment, nor does it involve the acquisition of equity.

Synonym for Ecopreneurship

Metric that measures the percentage of profits lost due to cancellations or downgrades of a service. The formula to calculate it is: MRR lost in a specific month - MRR at the beginning of that month.

Gross profit is a metric used by businesses to calculate profits after deducting the costs generated by the production and sale of their goods or services.

Growth hacker uses unconventional marketing strategies, which require little investment of money and result in great growth for the company.

Very talented programmer, who always finds a way to finish a project no matter what obstacles are in front of him.

Type of growth curve, highly sought after by start-up investors. Indicates that the start-up can potentially double some metrics year on year, such as sales.

A company whose principal office is located in the home of its owner. The company can be of different sizes or types.

Strategy that focuses on creating valuable content for users. In this way, it seeks to obtain a higher position in search rankings and drive traffic to a website. Some examples of actions carried out in this strategy are the creation of highly informative videos and guides.

It is the difference between expenses and revenues. This money remains available in the company to be reinvested in different ways.

Incubators are similar to accelerators. The main difference between them is that start-ups can come to an incubator without having a fully defined business plan. 

An independent contractor practices a profession or owns a business that allows him to offer his services to the public. The person who hires him only has the right to control or direct the result of the work.

Initial sale price for a company's shares.

Free support received by a small business from an organization. This can come in the form of more space for operations, supplies or professional services, among other things.

Legal protection for products designed by a person or company. It can come in many forms. Among them are patents, trade secrets and copyrights.

It is about designing products with the end user in mind. For example, in the case of an application, the user must be able to perform different tasks with as few obstacles as possible.

Someone who initiates entrepreneurial ventures in a large corporate environment.

Term to refer to the moment when someone shows traits and characteristics of entrepreneurship while being part of a larger company.

In an investment round, a company receives financing from investors, investment syndicates or other companies, among other sources.

Group of entrepreneurs who decide to jointly invest in a start-up, during an investment round.

A person capable of transforming creative ideas into viable solutions to real problems.

Also known as shares outstanding, this is the number of shares granted by a company and purchased by a stakeholder.

When a prototype is designed, it is the process of iteration that is performed to improve it. For this, it is necessary to have a good cash flow. 

A legal entity created by two or more businesses. In some cases, the businesses are competitors. The new entity carries out the business under the direction of its JV partners. The business is carried out in accordance with an Operating Agreement.

Tax credit program designed for Pennsylvania start-ups located in specific areas. Another requirement for start-ups is that they must have been founded less than 8 years ago and develop their own technology.

Another business start-up program in Pennsylvania, through which some businesses can operate out of certain zones without paying taxes, or at a greatly reduced rate.

Acronym for Key Performance Indicators. These are the metrics that allow a start-up to analyze its performance, progress and objectives. Some of the most used are acquisition cost and annually recurring revenue.

A website page created especially for a marketing or advertising campaign. This term is also widely used to refer to any transactional page of a website.

Event planned for the launch of a certain product.

The LEAN methodology focuses on building and rapidly testing minimum viable products, rather than building a more advanced product and waiting for customers to arrive.

Method that allows validating the business concept of a new company, in an economical and fast way. It is also widely used when introducing a new product to the market.

A business agreement where a company sells its intellectual property rights to a product or service to another company.

Total value of a customer to the company over the period of their relationship. It is calculated by multiplying the average revenue per account by the gross margin and dividing the result by the churn rate.

A legal entity that distributes profits to its owners while protecting personal assets from debt.

Type of association in which one or more of the partners have limited responsibilities. This allows not everyone to be affected by the behavior of a specific partner. Despite that, everyone bears responsibility for the debts formed within the society.

Term to refer to a partner of a company that does not have authority to manage it. His only liabilities are limited to the amount you have invested in the company.

Business arrangement in which the day-to-day operations of a company are overseen by one person or group, while its foundation is the responsibility of silent partners, who are legally liable for the company's losses, in proportion to their contributions and active involvement.

A type of loan in which the company only must pay interest on the money it uses. The company makes periodic payments on the outstanding debt balance. Commonly referred to as revolving credit. Even if not drawn upon, LOC impacts the D:E ratio.

It occurs when investors manage to convert some or all their shares in a company into cash. This is usually a consequence of an acquisition.

Period during which shareholders cannot sell their shares. It usually lasts between 90 and 180 days.

Term to refer to small local retail and service companies, which do not usually arouse the interest of investors. That's because they generally don't have high levels of development. These types of companies offer jobs and benefits for the economy, but at a local level. 

Any investor who invests more than a certain amount in a specific round. This gives you the right to obtain company-specific information and/or voting rights.

This term refers to the process of research, development and distribution of a product or service. It encompasses practices such as advertising, publicity, promotion and packaging of products or services.

Procedure that seeks to automate marketing activities through the use of software.

Also known as Marketing Intelligence Dashboard, it provides the company with an overview of all its KPIs.

Percentage of a market that a company acquires in a given period of time.

Money that is invested directly in forms of advertising, such as ads on social networks, instead of companies that carry out the marketing campaign.

The process by which two individual companies join together to become a larger company. Legally, both businesses must dissolve and transfer their assets to a new entity. 

Organizations with a structure similar to traditional VC funds, but smaller in size. Micro-VCs invest less money, and in earlier rounds, than traditional VC funds

A product or service that does not have a large number of functions, only those necessary to be released to the public.

Competitive economic advantage that a company has over others, and makes its business model superior in certain aspects. In addition, it makes it more difficult for other businesses to copy the model. 

Month-over-Month Growth Rate allows you to know how much a specific metric, such as number of followers or revenue, has grown over a short period of time. It is expressed as a percentage.

To calculate the MoM Growth Rate, you need to follow the formula (Month 2-Month1) / Month 1 * 100, where Month 1 is the month you want to know and Month 2 is the following month.

KPI used by social networks and other companies, which allows them to know the number of unique users who have visited a site during the last month. Generally, each user is recognized by parameters such as an ID number or a username.

They are the recurring and predictable earnings that a business receives on a monthly basis. It is usually a metric in SaaS companies.

A type of business in which a person receives income from sales of themselves and people who have signed up with the company. In turn, when these people sign up more people, the creator of the business receives money for the sales of the latter.

Metric that allows measuring the number of customers lost during a specific month. It is expressed as a percentage. To do so, use the following formula: (Number of Clients you lost on a month/Number of clients you had at the beginning of the month) * 100

This metric provides a projection of the current MMR, but annualized.

The net revenue churn allows us to know the revenue lost due to cancellations and downgrades, also taking into account new revenue from existing customers. The formula to calculate it is as follows: (MMR Lost-MMR from Upsells) this month /MMR at the beginning of the Month.

It is obtained by performing the following calculation: future inflows minus future outflows. It allows you to know if a project will be worth it in the future.

Type of business that needs a network of distributors to build and keep the business running.

A term that describes the formation of contacts by a business, which will allow it to form business relationships and increase its knowledge of the market, among other things.

An agreement between two parties, which prevents the parties from disclosing certain information. It is usually signed between a start-up and an advisor, so that the latter cannot disclose the products that the company develops or its key data.

Non-technical founders usually have little or no experience in the technical field of a business. For this reason, they usually start companies together with an expert in that field, and they oversee designing the business model and supervising the development of operations.

Metric that allows to know how many times users logged in on a website during a month.

Performance management framework, designed to encourage companies to set, communicate and monitor their organizational goals and results. It must be transparent, and align all business, team and individual objectives in such a way that they are easy to measure when evaluating results.

Software with source code that anyone can inspect, modify, and improve. It allows companies to invest less money in the development of products and apps.

System that allows software to work on any type of hardware.

Term that refers to the allocation of reserved shares, which will be granted as stock options through a company's capital incentive plan.

Form of distribution of property options. It consists of exercising the right to buy shares under certain conditions. When this occurs, the option to purchase shares is used, resulting in the issuance of shares. These are often used as compensation for employees, directors and other key people for the development of the company.

This marketing strategy consists of getting your product to customers by all possible means, without waiting for them to reach it. For this, paid campaigns on social networks are very useful.

Term that refers to the standard operational services that one business hires from another. Among these can be accounting, payroll and advertising.

Platform used by SaaS to develop their software.

It refers to two or more people who operate the same business for profit. This type of company is legally considered as a group of individuals, and each of them presents their profits in their tax returns.

A property right that is granted to the inventor of a product, which prevents it from being replicated or marketed by third parties for a period of time.

PPC is a system of advertisements for businesses on a search engine or website. Companies must pay each time a user clicks on their ad.

The "Pay to Play" provision obliges an investor to participate in the next round of investment, even if it is a down round. If the investor refuses to do so, then he may suffer as a consequence the conversion of his preferred stocks to common stocks.

Also known by its abbreviation P2P, it is a form of online financing in which individuals lend money to businesses.

Detailed plan that allows carrying out the administration of an enterprise.

Term used for the ways to present and ''sell'' an idea to investors, trying to win funding. Usually, a pitch is presented by the start-up manager.

Presentation that usually lasts between 5 and 10 minutes, to explain to investors the key aspects of your business because it can be a good investment. It is advisable that a pitch deck is no longer than 10 slides.

Variation or complete change of focus of a business. This can be due to different factors, such as customer feedback or innovation.

Term to refer to all the companies in which an investor has invested.

A company that has received an investment from an investor becomes a portfolio company.

The value of a company after receiving outside investment, or before the last round of financing

A share in the capital of a company, which has a fixed value and at the same time priority during the liquidation sequence. 

The value of a company before receiving outside investment, or before the last round of financing.

The period in which the founders of a company launch their operations for the first time. It is usually financed by the founders (bootstrapping) and friends or family (FFF). This allows to cover start-up costs, as well as the development of a minimum variable product.

A type of investment in which the valuation of the company is determined by a negotiation in which the company and the investor are involved. It must include a price per share, since this will make it clear which part of the company is owned by whom. 

Term to refer to companies not listed in the public market.

Investment method that uses funds to invest in private companies, which are not listed on the market.

A product manager is the person who, among other things, is responsible for identifying customer needs, guiding the product roadmap and overseeing the product development team. They are responsible for Customer Discovery.

The product-market fit is achieved when the customer acquisition value is less than the life-time value. In addition, your current customers start recommending your products to other customers, so you no longer need to promote them heavily.

Process of launching a product to the market. It includes tasks such as deciding on the message to be conveyed by the product or making sure that potential users understand the value that the product can bring them.

A product owner is typically a technical person, who works in tandem with the Product Manager to translate the user stories into functional requirements. The product owner typically oversees the Development team.

A summary that provides a high-level view of the vision and direction of a company's product offering over time.

It refers to a process that studies whether an idea has enough potential to be developed or not.

The first model a company builds of a product. It is not released to the market, as it is used for testing and subsequent improvements.

Term that refers to companies that are listed in public markets, such as New York Stock Exchange.

Deliberate promotion of an image, with the aim of publicly associating to a company.

Test to check if an application is working properly or needs modifications.

Website that allows you to ask questions, which are answered by experts in different fields of the industry.

Compensation on federal taxes, which seeks to stimulate companies to invest in research and development.

Marketing strategy that focuses on recommendations from other users, to increase the customer base.

A list of statements or material facts to which an entrepreneur commits himself, and which are included in the documentation required to make an investment

Process that allows testing, iterating and developing new products. Requires a good amount of share funding.

The retention rate indicates the ability of a business to maintain its current customer base. It is important that it is higher than the churn rate.

Also known as ROI, it is the return on time and money invested that every startup expects, in aspects such as marketing practices or employee hiring.

The amount of money generated, which is calculated after payment of business expenses. 

Key metric for startups. It allows estimating the performance of a company in the future, in different aspects such as earnings. To make this forecast, current data is taken into account.

Synonym for burn rate

Tax relief scheme implemented by the UK, which seeks to encourage investment in companies and startups during the seed stage.

Abbreviation for Software as a Service. This business model consists of offering a software subscription, which must be paid monthly.

A SAFE note is a form of convertible security, used by start-ups to raise funds. It consists of promising an investor the possibility in the future to buy a certain amount of shares at a price agreed upon by both parties. 

Exchange of a product or service for money.

Scalability is the ability of a business to grow to meet the increasing demand of its customers

It is said of a business that has a model capable of growing with scalability.

Make a company grow, without this implying a decrease in the quality of its services, efficiency or effectiveness

This term is used to refer to a company that has reached its growth phase.

Abbreviation for Service Corps of Retired Executives. These offer strategic advice to small businesses.

One of the Agile methods for project management. It requires different participants: the product developers, the Scrum Master, in charge of helping to solve obstacles to the developers, and the product owner, who has a great knowledge about the end user of the product.

SEO is known as the process of improving aspects such as user experience, crawlability and the amount of relevant content on a web page, to improve its search engine positioning.

U.S. agency that is responsible for regulating sales of corporate securities  

A venture capital fund, which specializes in investing in very early stage start-up companies.

The first official round of startup funding or equity financing, involving investors.

This is the round following the angel round. Companies that receive money in this round usually follow the trend of having found a viable business model for their customer base.

Platform designed for communication with customers, which allows to design and send transactional and marketing emails.

Term to refer to an entrepreneur who has already founded and managed two or more businesses or ventures.

Financing rounds that allow companies to raise money from venture capitalists. They are denominated with letters, according to their order. For example, the first round is named with the letter A, the second with the letter B and so on. 

Companies that receive money in a series A round usually have found a product that allows them to arouse the interest of venture capitalists, while companies that receive money in subsequent rounds usually have achieved further development.

Problem that occurs when there are more companies that obtain financing from angel investors than those that finally obtain financing in the following rounds.

First round of investment involving angel investors and seed funds. This round follows the friends and family round and precedes the A round.

An agreement signed by all the shareholders of a company in which they agree on various aspects, such as which parties have the right to vote on the members of the board of directors.

A form of financing for early stage companies, which was developed by Y Combinator. It solves several problems associated with traditional convertible note financing.

U.S. agency that provides full-service, customer-oriented programs and accurate information to entrepreneurs. 

A U.S. government funding program, coordinated by the Small Business Administration, that seeks to assist certain small businesses in conducting research and development activities. Recipient projects must have a high potential for commercialization, in addition to meeting government research and development needs.

Investment approach that relies on other known individuals who provide support to a particular company.

Company that seeks to create a social benefit, from the implementation of various business methods.

Acquisition made in an attempt to rescue an unsuccessful startup. Generally, it is done for a small amount of compensation. 

Business owned and operated by one person.

Entrepreneur who decides to start a company on his own. This business model is widely used today, by people such as freelancers or developers.

Particular type of initial public offering, widely used by shell companies, which implies the purchase of a company that is listed on the market but does not have an ongoing business. It is not considered illegal. 

List of technologies necessary to develop and launch a certain app on the market.

Company that is in its early stage of operations. Usually, it is financed by the entreprenaural founders in the initial starting period.

Startup that decides to operate without being detected. This allows the startup to develop a product or service without alerting the competition, until the time of the official launch.

Relationship between two businesses, which come together to achieve a common goal.

Term to refer to an investor who forms a company, who decides to finance a company that is in an early stage of development due to the interests of his own company.

Commission paid to an intermediary who has been very helpful in carrying out a very important transaction. It is measured in percentage.

Term used to refer to human capital, which encompasses time, skills and knowledge, since it does not require monetary compensation but can bring benefits to the company in the future.

Fund made up of investments from multiple Venture Capitalists or Angels. They are usually led by specialists, and financed by institutional investors or sophisticated angels. Generally, syndicates are private.

Term to refer to a startup that is being considered as a possible investment by Angels or Venture Capitalists.

Group of potential clients with similar needs and objectives, to whom a company targets for the development of its products or services.

Term to refer to companies that use a high level of existing technology to develop their products.

Term to refer to the founder or founders of a company who have a greater experience or knowledge in the technical aspects of the field in which a startup focuses.

Technology Readiness Levels provide a framework for estimating the maturity of technologies. TRLs enable consistent and uniform discussions of technical maturity across different types of technology. Commonly used in applications for government assistance

Entrepreneurship with a strong focus on technological aspects.

Department responsible for the transition of research or a technology of an institution, for its subsequent commercialization. It is usually part of a university institution.

Although they do not guarantee that an investment will be made, term sheets are important as a starting point for negotiations and for outlining the terms of a potential investment.

Existing gap in the financing of new companies or investigations that are in an initial stage. This will ultimately end up deciding what kind of ventures or investigations are likely to be successful.

Term to refer to the income possibilities offered by a certain product or service. It is also known as Total Available Market.

The TCV considers all potential revenues associated with a contract. These are estimated at the beginning of the contract.

Term that refers to the evaluation of the metrics of a startup. It is very valuable to investors as it will allow them to assess whether an investment opportunity will actually be profitable. A very effective way to build traction is through inbound marketing. 

A trademark is a form of legal protection for names, words, colors or even symbols associated with a brand or product. The trademark can be extended as long as the company continues to use it.

Startup company that manages to reach a value of more than 1 billion dollars.

It is an aspect that makes a product or service stand out from other similar products or services offered by the competition. It is also known by its abbreviation USP.

Number of shares that have been authorized to be issued, but have not yet been issued to shareholders.

Unit economics are highly relevant when calculating the profitability of a product or service. It is calculated by dividing a customer's lifetime value divided by its acquisition cost.

Also known as Spin-off, it is the moment in which a university sells the intellectual rights to a technology developed by the institution to a company.

The degree to which users can effectively and efficiently use a product. This allows them to achieve the expected results more easily.

Term used in web or application development, which refers to how easy it is for the user to navigate through the different pages or sections.

The design of an application, which is seen by the user.

Validation signs indicate that a product or service has a real demand in the market. One of the strongest is when many users buy and recommend the product to others.

Term that refers to the valuation of a company. To arrive at a reliable result, it is necessary to take into account two aspects: pre-money valuation and post-money valuation.

A statement or promise of value about a particular product. For example, it may be mentioned that the use of a product may bring certain benefits

Type of financing widely used by start-ups. It is an exchange, in which the start-up exchanges part of the control over it for money.

Private equity investor, who focuses on companies that have high growth potential, although they are also riskier investments. In exchange, they receive compensation in company stock.

Debt financing provided by specialized banks or non-bank lenders to companies that are backed by venture capitalists. 

Video that usually lasts between 30 and 60 seconds, widely used to present an idea to investors.

Venture Capitalist that operates by taking advantage of the problems that an entrepreneur may have, such as debts. .

A person who aspires to become an entrepreneur. May have a general idea of his ultimate goal but has not yet started to implement it.

A term that refers to the order in which employees, angel investors, and other types of investors receive their money upon exit. In general, the order is usually from the last one who had an equity participation to the first.

Two-dimensional representation of a web page or app interface, which is often the first step in the rapid prototyping process.

Process of designing a wireframe.

An event attended by a group of people to receive training in a specific aspect. Some last only a few hours, while others may last for months.

A report that indicates the actual market value of a company's common stock. This report is prepared in accordance with the guidelines issued by the regulatory agencies. 

This is the form that indicates to the tax authorities that tax will be paid on the value of the shares granted to date.