Start-Up Dictionary: Crack The Start-Up Code
Start-Up Dictionary: Crack The Start-Up Code
12 February, 2016
Start-ups are wonderful things. We know, we recruit grads for them, but in doing so we find that they have a language that can be a bit cryptic. With that in mind, we’ve prepared a little cheat sheet for you so you can understand what the most relevant terms mean. Sneak a few of these into a job interview with a Start-up and you’ll be laughing!
This is an individual who invests a small amount of capital in return for a stake in a company. They are usually early investors and often give the Start-up a boost before the Seed Round, often when the company is in its infancy.
A company is bootstrapped when it is funded by an entrepreneur's personal resources or the company's own revenue. Evolved from the phrase "pulling oneself up by one's bootstraps."
A shared working environment, where multiple small businesses and individuals work together in one office. These are a popular option for Start-ups, who can really benefit from being around other like-minded entrepreneurs.
The process of raising funds to start a business or new project by raising relatively small amounts of money from a large pool of people. Sites like Kickstarter and Crowdcube really pushed investing in new businesses into the mainstream for the general public.
Also known as disruptive innovation. An innovation or technology is disruptive when it "disrupts" an existing market by doing things such as: challenging the prices in the market, displacing an old technology, or changing the market audience.
An organization that helps develop early stage companies, usually in exchange for equity in the company. Companies in incubators get help for things like building their management teams, strategizing their growth, etc.
Initial public offering. The first time shares of stock in a company are offered on a securities exchange or to the general public. At this point, a private company turns into a public company (and is no longer a Start-up).
The act of a Start-up quickly changing direction with its business strategy. For example, an enterprise server Start-up pivoting to become an enterprise cloud company.
This is the much-talked-about "return on investment." It's the money an investor gets back as a percentage of the money he or she has invested in a venture. For example, if a VC invests $2 million for a 20 percent share in a company and that company is bought out for $40 million, the VC's return is $8 million.
Start-ups raise capital from VC firms in individual rounds, depending on the stage of the company. The first round is usually a Seed round followed by Series A, B, and C rounds if necessary. In rare cases rounds can go as far as Series F, as was the case with Box.net.
Software as a service. A software product that is hosted remotely, usually over the internet (a.k.a. "in the cloud").
Scale-ups evolve from Start-up companies as they begin to achieve more rapid growth. By this point, a company has developed a scalable business model and the main challenge now is growth whilst maintaining operational controls. Scale-ups often have ambitious hiring plans and are great companies to join.
The seed round is the first official round of financing for a Start-up. At this point a company is usually raising funds for proof of concept and/or to build out a prototype and is referred to as a "seed stage" company.
SMEs stands for ‘Small and Medium-sized Enterprises’. In other words, they are companies which employ fewer than 250 employees. Currently, over 99% of UK businesses are SMEs, and together they employ far higher numbers of people than larger companies. They really are the backbone of the UK economy!
A start-up company is a company in the early stages of operations. Start-ups are usually seeking to solve a problem of fill a need, but there is no hard-and-fast rule for what makes a start-up. A company is considered a start-up until they stop referring to themselves as a start-up.
This term denotes a privately-owned Start-up business which is valued at over $1 billion. The ‘Unicorn Club’ includes some of the world’s most well-known tech companies, such as Uber, Airbnb, Snapchat and Pinterest.
Money provided by venture capital firms to small, high-risk, start-up companies with major growth potential.
Hopefully this glossary has shown you how interesting the world of Start-ups really is. If you're keen to find out more, why not head over to our blog or even go straight to our vacancies and get applying!
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