Startup Dictionary for Newbies.


Simplifying the startup culture for people who are new to this and face difficulty in understanding what is being spoken.


Roshan J. July 23|5 min read

Developing Startups to solve common life problems has received good attraction from individuals of diverse fields and has gained momentum as well in the recent years. In India itself the number of startups has increased fast for which support is available abundantly in all dimensions.Everyone wants to know about how these startups evolved, who invested in them,what were the decisions involved that led to their remarkable growth and many more questions❓❓Let me explain the terms related to what startups are and what all parameters are considered while building a startup.

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This is an attempt in collecting and compiling the definitions of all terms related to the world of startups that can help you in understanding the news circulated about them. Hope it helps🙂



A



1) Angel Investor: Angel Investors are those who will invest in your startup in the very beginning without any business model,without any revenue which is why they are called angels.


2) Average Revenue per User(ARPU): At the point that you start your revenue and how many transacting users are there,if you divide the total revenue with transacting users,you get average revenue per user.


3) Acqui Hired: If your startup doesn't do well,but the talent that you have created including you is strong,technology is very strong,then someone can acqui-hire you which means that they will not give you any money to acquire your start-up but they will absorb all the talent and the people and the technology from your startup.For this you will join that startup,you will be given a designation,a salary,you will build something independently.There will be no money or cash exit but you will have another place to build your new idea in.



4) Acquisition: If there is acquisition then it involves a cash or stock component.It could be a start-up that acquires your start-up,they will then do that in the form of cash or stock or a combination.


5) Alpha Testing: Your product is about to be launched,but you have provided a version of your product which is being internally circulated among your employees and engineers so that it can be evaluated by them, this is the process of alpha-testing.



B



1) Beta Testing: A very basic form of your product is provided after alpha-testing to a few of your customers so that they can check it, so it will go outside of your company,but it will not be sent to the entire market. This process is called as beta testing.


2) Bootstrapping: Bootstrapping means that you will not take any money from outside, you will run your start-up with your own money which could also include the contribution of friends and family.


3) Burn Rate: Burn rate means the amount of money that you lose every month as a loss.So if you are in initial days and your revenue cannot fully compensate for your current cost, then the number which you get when you subtract revenue from total cost determines the burn rate.


4) Business Model: Business Model is a document which represents clearly for each month , each quarter, each year , how will your startup perform in terms of expenediture,revenues and profits as well as losses.This is an immediate and near future prediction but it also includes previous or past data,so if you were involved in a startup,then the monthly revenues,expenditure as well as profits and losses experienced in the past,that will contribute to this document and how it will be represented in the upcoming times is part of this entire business model.


5) Business Plan: Business Planning is done along with business model,which is what is the product strategy?Who are its consumers?What is its go to market strategy?How are we going to compete with competition?Naturally,what is the business model?Depending on the business model,how will the startup project its desired valuation and justify it?How big can we become?The above process and other steps taken is derived from the business plan which is being shared with someone to help them understand your business.