Startups

The process of growing a business by increasing output and revenue while keeping complexity and overhead costs from rising at the same rate.

A basic first version of a product containing only the essential features needed to gather feedback and test assumptions with real customers.

Ownership interest in a company, represented by shares or stock, which defines a person's share of control, risks, and financial returns. It is calculated as total assets minus total liabilities.

The decrease in the ownership percentage of existing shareholders when a company issues new shares of stock. It reduces ownership share and voting power for all existing stockholders.

A spreadsheet or ledger that shows the ownership breakdown of a company, including founders, investors, and employee options. It details all securities: common, preferred, warrants, and options.

A block of company shares set aside for future employees, advisors, and consultants to align their incentives with company growth. Allocated as common stock, it helps attract and retain top talent.

The process by which an employee or founder earns full ownership of their shares or stock options over a set period of time. Rights accrue over time or upon reaching milestones, tied to service.

A strategic change in business direction to test a new hypothesis about a product, target audience, or business model. It is a structured course correction based on market feedback and data.

Quantitative evidence of customer demand and engagement, showing that a business is starting to gain momentum in its market. Measured by customer acquisition, revenue, or user engagement.

The total revenue opportunity available if a business achieves one hundred percent market share for its product or service. It equals maximum revenue potential if the entire market were captured.

The portion of the total addressable market that a business can actually target and serve based on its geography, technology, and business model.

The specific portion of the serviceable addressable market that a business can realistically capture, especially in the short term. It reflects current operational capacity and resource limits.

A company's core plan for creating value, delivering it to customers, and capturing revenue to remain profitable. It covers operations, target customers, revenue generation, and financing.

A one-page strategic management tool used to define, visualize, and analyze the key components of a business model. Its nine blocks span value, customers, channels, revenue, and costs.

The stage where a startup identifies a real, meaningful customer problem and designs a solution that addresses it. It is confirmed when customers care about the problem and the solution fits.

The stage where a startup has built a product that successfully satisfies a strong market demand. It is marked by rapid customer acquisition, strong retention, and word of mouth.

A business's ability to maintain a competitive advantage to protect its market share and long-term profits. It is a structural barrier protecting superior financial performance over time.

A brief presentation used by founders to give investors a quick overview of their business model, market opportunity, and growth plans. It aims to secure a follow-up meeting with potential investors.

A non-binding agreement setting forth the basic terms and conditions under which an investment will be made. It summarizes key financial and governance terms as the basis for binding documents.

A simple contract between a startup and an investor that provides the investor with the right to receive equity in the future upon a specific triggering event.

The valuation of a company before it receives a new round of investment. It is the agreed value before new capital arrives, and it determines the price per share.

The valuation of a company immediately after it receives a new round of investment. It equals pre-money value plus new capital, reflecting total capitalization post-funding.