Evaluating and naturally using business startup terms in the everyday operations of a business is a prerequisite for every entrepreneur. One of the most crucial things that are required in becoming an entrepreneur is to get comfortable and familiar with business and more precisely in this scenario, the language of a startup.
Non-technically or technically the best entrepreneurs may not be experts at all the operations but are definitely able to speak many languages and wear many hats whether it is with the programmers, the finance teams, designers, business developers, marketers, or other people. Let us discuss the basic terms used in entrepreneurship.
8 Business Startups Terms For All Entrepreneurs
In this article, we will be discussing 9 business startup terms that every entrepreneur should know in order to raise a good amount of funds and also run their startup successfully. Here you will find the entrepreneurship terms A-Z. These are the words to describe startups. So without any further delay let us get started with that.
The first entrepreneurship terminology is Acqui-hired. When a small, drowning company is bought because of its staff. It is a kind of like grabbing the intellectual capital of a talented, ready made crew. According to reports, between 2012 and 2013, 60% of all the acqui-hired technological companies were internet and 38% of the companies were mobile.
An individual who invests their own money at an early stage in exchange for gaining a share of the company. An angel can include an entrepreneur with a high net worth or friends or family members who are willing to invest in a good idea. These investors tend to invest a few dollars compared to venture capitalists, even though some form angel groups to invest in higher opportunities of business.
Another important business startup term is the Burn rate. The proportion of cash you are spending every month in relation to your capital. Divide the capital amount of your business by the burn rate to evaluate your company’s lifespan.
A note is a virtue, a percentage of equity ownership of a business. There are some business owners who use convertible notes if they wish to attract angel investors without the need to put a valuation on the company. The note takes the shape of an equity as soon as another investor arrives.
Disrupt / Disruptive
To explain this, we will need to quote a line from The Investor’s Dilemma, by Clayton M. Christensen in 1977,
Since then, disruptive has become a way to define a technology or product that will alter its marketplace.
The way you visualize getting money out of your business. It is another way to think about your future plans for your business. Either you have plans to sell it, merge with other businesses, get acquired, liquidate the business completely, or go public. Getting this answer will now keep you a step forward.
The Initial Public Offering or IPO of a company. Take this as just another avenue to raise funds. You are providing your company’s shares for the public to buy it. There are chances for it to make you rich, but at the same time, it can cost a lot. These deals are formed by investment banks and your business is valued by the analysts. There are both advantages and disadvantages of going public and only a small amount of millions of companies in the U.S actually do it. IPO investments can be subject to market risks but can also pay off big for some investors.
Startup incubators are groups that support selected entrepreneurs and / or their companies with funding and mentorship. In exchange for that, the incubator takes a stake of equity in the company. These incubators have been termed as the new business school because of their increasingly competitive and popular tech world.
The Bottom Line
A startup is above an early stage company and hence there are many business startup terms that all entrepreneurs should be aware of. These terms come into use while you are in a meeting with the investors or at any startup based conference. So the above article deals with 8 such important new business terms used in startups for your better communication.