Startup Glossary for Agri Folks

A program that supports startups through mentorship, funding, and resources to accelerate growth. These programs typically last a few months and culminate in a demo day where startups pitch to investors.

The process of one company purchasing most or all of another company's shares to take control. Acquisitions can help companies expand their product lines, enter new markets, or gain new technologies.

A group of external experts who provide strategic advice and support to a company's management team. Advisory boards can help startups make informed decisions and navigate challenges.

An individual who provides capital for a startup, usually in exchange for convertible debt or ownership equity. Angel investors often provide not just funding but also mentorship and industry connections.

The annualized value of recurring revenue from subscriptions or contracts, important for subscription-based businesses. ARR helps businesses forecast future revenue and plan for growth.

A financial statement that summarizes a company's assets, liabilities, and shareholders' equity at a specific point in time. The balance sheet provides a snapshot of a company's financial health.

Starting and growing a business with limited external funding, relying on personal savings and revenue. Bootstrapped companies often prioritize profitability and efficiency from the outset.

The rate at which a startup spends its cash reserves before generating positive cash flow. Understanding burn rate is crucial for managing runway and planning for future funding needs.

A strategic management template used to develop new business models and document existing ones.

The total cost of acquiring a new customer, including marketing and sales expenses. It is essential to compare CAC to LTV to ensure that the business model is sustainable.

The percentage of customers who stop using a product or service within a given period. High churn rates can indicate issues with customer satisfaction or product fit.

A type of short-term debt that converts into equity, typically during a future financing round. Convertible notes are often used in early-stage funding to delay valuation negotiations.

Raising small amounts of money from a large number of people, typically via online platforms. Crowdfunding can help validate a product idea and build a community of early supporters.

The total revenue expected from a customer over the duration of their relationship with a company. Comparing LTV to CAC helps assess the long-term viability of customer acquisition strategies.

An event where startups pitch their businesses to potential investors, often the culmination of an accelerator program. Demo days provide exposure and networking opportunities for startups.

The investigation and evaluation process conducted by investors before making an investment. Due diligence includes examining financial records, business models, and market potential.

Ownership interest in a company, typically in the form of stocks or shares. Equity can be used to attract investors, motivate employees, and align interests with business success.

A plan for how a founder or investor will sell their stake in the company, often through acquisition or IPO. A well-defined exit strategy helps attract investors by providing a clear path to returns.

A business model offering basic services for free while charging for premium features. The freemium model can help attract a large user base and upsell them to paid tiers.

The process of seeking and securing financial investment to support business operations and growth. Fundraising involves pitching to investors, negotiating terms, and closing deals.

A plan outlining how a company will launch a product and reach its target customers. A successful GTM strategy involves understanding the market, defining value propositions, and executing marketing and sales tactics.

Rapid, exponential growth in a company's user base or revenue, resembling the shape of a hockey stick. This type of growth is often sought after by startups and investors.

A program providing support, mentorship, and resources to early-stage startups to help them grow. Incubators often offer office space and access to a network of advisors and investors.

The process of offering shares of a private company to the public in a new stock issuance. An IPO allows a company to raise capital from public investors and increase its visibility.

Metrics used to evaluate the success and performance of a business or specific activities. KPIs should be aligned with business objectives and regularly monitored to drive decision-making.

A methodology focused on developing businesses and products through validated learning, rapid experimentation, and iterative releases. The lean startup approach aims to reduce waste and improve efficiency.

The extent to which a product is recognized and bought by customers in a particular market. High market penetration indicates strong brand recognition and customer acceptance.

The process of dividing a market into distinct groups of potential customers based on various characteristics. Effective segmentation helps tailor marketing efforts and product offerings to specific needs.

A product with the minimum features necessary to validate a business idea and gather user feedback. An MVP allows startups to test hypotheses and iterate based on real-world data.

The monthly revenue generated from subscription-based services, critical for forecasting and growth. MRR provides a stable and predictable revenue stream for businesses.

A measure of customer satisfaction and loyalty based on the likelihood of customers to recommend a product or service. NPS is a key indicator of customer sentiment and can inform retention strategies.

A key metric that reflects the core value a company delivers to its customers, guiding growth and strategy. Focusing on the North Star Metric helps ensure alignment across the organization.

A presentation used to communicate the business plan, vision, and potential to investors. A compelling pitch deck should cover key aspects such as the problem, solution, market, traction, and team.

A significant change in a company's strategy or product offering based on feedback or market conditions. Pivots are common in startups as they adapt to new insights and opportunities.

The valuation of a company before it receives any new outside investment or financing. Pre-money valuation is used to determine the ownership stake that new investors will receive.

The degree to which a product satisfies strong market demand, often indicating potential for growth. Achieving product-market fit is a crucial milestone for startups aiming for scale.

The amount of time a company can operate before it runs out of cash, based on its burn rate. Managing runway effectively is essential for planning fundraising and growth activities.

A software distribution model where applications are hosted by a service provider and made available to customers over the internet. SaaS businesses often rely on subscription revenue and recurring billing.

The initial round of funding used to support early-stage business development and growth. Seed funding helps startups develop their product, conduct market research, and build initial traction.

Subsequent rounds of funding following seed funding, used to scale the business and expand operations. Each round typically involves larger investments and more sophisticated investors.

Ownership interest created by the hard work and effort of the founders or employees. Sweat equity is often used to compensate team members when cash is limited.

A non-binding agreement outlining the basic terms and conditions under which an investment will be made. A term sheet serves as a starting point for detailed negotiations and final agreements.

The total revenue opportunity available for a product or service if it achieves 100% market share. Understanding TAM helps startups assess the potential scale of their market opportunity.

The direct revenues and costs associated with a particular business model, measured per unit. Positive unit economics are crucial for ensuring long-term profitability and sustainability.

The process of determining the present value of a company, often used in the context of investment. Valuation influences the amount of equity given up in exchange for funding.

A statement that explains how a product or service solves a problem, delivers benefits, and why it is better than alternatives. A clear value proposition helps attract customers and differentiate from competitors.

Financing provided by investors to startups and small businesses with high growth potential. Venture capitalists offer not only funding but also strategic guidance and industry connections.

The process by which employees earn the right to acquire shares or options over time, typically used as a retention tool. Vesting schedules motivate employees to stay and contribute to the company's success.

The process of understanding, anticipating, and influencing consumer behavior to maximize revenue or profits. Yield management is often used in industries like airlines and hospitality.