Core Business Terms
If you’re an aspiring founder or student founder, you must master these terminologies.
- Scalability – Can your business grow without breaking? A scalable startup can serve 10x more customers without 10x more cost.
- Traction – Are people actually using your product? Early evidence of demand.
- MVP (Minimum Viable Product) – The smallest, simplest version of your product that solves the main problem and teaches you something.
- Pivot – Changing direction when something is not working. Not failure – strategic adaptation.
- Bootstrapping – Building without outside funding, using only your own resources and revenue.
- Monetisation – How you actually make money from what you built.
- Market Research – Understanding your customers and competition before building.
- Customer Centric – Keeping the customer at the centre of every decision.
Financial Terms
- Burn Rate – How fast you are spending money. Monthly cash consumption.
- Runway – How many months you can survive before the money runs out. Cash in bank ÷ monthly burn = runway.
- Lifetime Value (LTV) – Total revenue one customer brings over their entire relationship with your business.
- Unit Economics – Does your business make money on each individual transaction?
- Break-Even – The point where revenue equals costs. Every sale after this is true profit.
- Working Capital Cycle – The time between paying suppliers and getting paid by customers. Cash must survive this gap.
- Churn Rate – The percentage of customers who stop using your product in a given period.
Funding and Investment Terms
- Angel Investors – Early-stage individuals who fund startups with personal capital, usually before institutional investors.
- Venture Capital (VC) – Professional investment firms that fund high-growth startups in exchange for equity.
- IPO (Initial Public Offering) – When a startup goes public and sells shares to the public for the first time.
- Seed Funding – The first official round of investment, typically used for product development and market validation.
- Pre-money / Post-money Valuation – company value before and after investment money comes in.
- Term Sheet – The document outlining key conditions of an investment deal.
- Equity – Ownership percentage in a company.
Strategy and Operations Terms
- Sustainability – Can your business survive and grow over the long term?
- Leverage – Using borrowed resources or partnerships to amplify results beyond your own capacity.
- Integration – Connecting different systems, tools, or teams to work together seamlessly.
- Go-to-Market (GTM) – The plan for how you will reach your first customers and deliver your product.
FAQ
What is the difference between burn rate and runway?
Burn rate is how fast you spend money (monthly cash consumption). Runway is how long you can survive - calculated as total cash ÷ monthly burn rate. A startup with ₹10 Lakhs and ₹2 Lakhs monthly burn has a 5-month runway.
What is the difference between B2B and B2C?
B2B (Business-to-Business) means selling to other companies. B2C (Business-to-Consumer) means selling directly to individual customers. Some startups serve both (B2B2C).