Glossary

Bootstrapping? MVP? Business Model Canvas? In the start-up scene, we encounter a very special vocabulary. To help you understand what the individual terms mean at the start of your start-up journey, we provide you with an overview of many basic technical terms in our start-up glossary.

A | B | C | D | E | F | G | H | I | J | K | L | M | N | O | P | Q | R | S | T | U | V | W | X | Y | Z

A

Accelerator

Program that helps start-ups grow faster, often through mentoring and funding.

Agile Development

Flexible project management approach that promotes iterative progress and responsiveness to change.

A/B Testing

Testing method to compare two versions of a product to determine which performs better.

Advisor

An Advisor is an experienced individual who provides strategic guidance, mentorship, and industry expertise to a start-up or business, often helping with decision-making, networking, and scaling in exchange for equity or compensation.

B

Business Model Canvas

Strategic template for developing and documenting a start-up's business model.

Bootstrap

Launching a start-up with minimal external funding, relying instead on revenue or personal savings.

Business Plan

A Business Plan is a detailed document outlining a company’s goals, strategies, target market, financial projections, and operational plans, serving as a roadmap for growth and a tool to attract investors or partners.

Business Angel

A Business Angel is a private individual who invests their own money, expertise, and network into early-stage start-ups, typically in exchange for equity, to help them grow and succeed.

C

Crowdfunding

A method of financing where many people contribute small amounts, often through platforms.

Customer Acquisition Cost

The cost associated with gaining a new customer, key for understanding profitability.

Cap Table

A Cap Table is a spreadsheet or document that outlines the ownership structure of a company, detailing shares, equity, and investment stakes held by founders, investors, and other stakeholders.

C-Level (CEO)

C-Level refers to high-ranking executive roles in a company, such as CEO (Chief Executive Officer), CFO (Chief Financial Officer), or CTO (Chief Technology Officer), responsible for strategic decision-making and leadership.

D

Disruptive Innovation

Innovation that creates a new market, displacing established competitors.

Data-Driven Decision-Making

Using data analytics and metrics to guide business strategies and choices.

Due Diligence

Careful assessment of a company before investment, examining financial and market positions.

Diversity

Diversity refers to the inclusion and representation of individuals from different backgrounds, such as gender, ethnicity, age, religion, sexual orientation, abilities, and perspectives, within a team, organization, or community.

E

Equity

Ownership interest in a company held by founders and investors.

Elevator Pitch

A brief and impactful presentation of a business idea to potential investors.

Exit Strategy

Plan for founders and investors to realize returns, e.g., through a sale or IPO.

F

Funding Round

A round in which a start-up raises capital from investors, e.g., Series A, B, C.

Freemium

Business model offering a free tier with optional paid features for revenue generation.

Founder Fit

The alignment of a founder's skills and passion with the start-up’s mission and challenges.

G

Growth Hacking

Marketing strategy that uses creative, data-driven methods to achieve fast scaling.

Go-To-Market Strategy

Plan for how a company will reach and serve its target customers effectively.

Greenwashing

Greenwashing refers to misleading marketing or communication practices by companies that falsely portray their products, services, or operations as environmentally friendly to appeal to eco-conscious consumers.

H

Hackathon

Event at which interdisciplinary talents from different areas come together to develop innovative and sometimes unusual solutions for real and relevant problems from industry / business. The term is a combination of ‘hacking’ and ‘marathon’.

Hockey Stick Effect

Business model offering a free tier with optional paid features for revenue generation.

I

Incubator

Organization or program that supports early-stage start-ups with funding, curriculum, resources and networks.

Intellectual Property (IP)

Legal rights that protect innovations, essential for science start-ups to secure their discoveries.

Impact

Repetitive process of developing and refining a product or idea based on feedback.

Initial Public Offering (IPO)

An IPO describes the first public issue of a company's shares on the stock exchange. The main aim is to raise new capital for the company from a wider range of investors.

J

Just-in-Time (JIT)

An inventory strategy where materials or products are delivered just when they are needed in the production process, minimizing storage costs. Common in lean manufacturing and tech start-ups to reduce waste and improve operational efficiency.

Joint Venture

A business arrangement where two or more parties agree to pool their resources and expertise to achieve a common goal, sharing risks, profits, and responsibilities.

Jumpstart

To quickly launch or energize a project, business, or initiative. Often used to describe the initial phase of a start-up's growth or development. A jumpstart is crucial for building momentum in the early stages of a start-up’s journey.

K

KPI (Key Performance Indicator)

Metrics for measuring a start-up’s success, e.g., revenue growth or user retention.

Knowledge Transfer

Process of sharing scientific knowledge for practical use, often through partnerships with industries.

Key Partners

Essential collaborators that help achieve a business's objectives, e.g., suppliers or strategic allies.

Key Activities

Core actions that drive value in a business, such as production, marketing, or sales.

L

Licensing

Process where scientific start-ups grant rights to use their technology in exchange for royalties.

Lifetime Value

The projected revenue from a customer over their entire relationship with the company.

Lean Start-up

Method focused on quickly testing hypotheses and minimizing waste.

Letter of Intent (LoI)

As a written declaration of intent, it serves two parties to document a fundamental interest in the realisation of a transaction, a negotiation or the general conclusion of a contract.

M

Minimum Viable Product (MVP)

Basic product version enough to test market demand.

Market Fit

Degree to which a product satisfies a strong market demand.

Monetization Strategy

Plan for generating revenue, such as subscriptions, ads, or direct sales.

N

Non-Disclosure Agreement (NDA)

A Document, in which two parties agree which information remains confidential during negotiations or the conclusion of a contract and may not be passed on to third parties. This mainly applies to issues relating to internal processes and agreements.

Networking

Networking refers to the process of building and maintaining professional relationships to exchange information, advice, and opportunities. It is essential for business growth, partnerships, and career development.

Niche Market

A niche market is a specific segment of the market that focuses on a particular product, service, or audience with distinct needs, often serving a specialized demand that is not addressed by the broader market.

Net Promoter Score (NPS)

NPS measures customer loyalty by asking how likely customers are to recommend a company’s product or service to others, on a scale of 0-10.

O

Onboarding

Onboarding is the process of integrating new employees into a company, helping them understand the company culture, policies, and their specific roles to ensure a smooth transition and effective performance.

Operations

Operations refers to the day-to-day activities involved in running a business, including production, logistics, management, and service delivery. It ensures the smooth and efficient functioning of all business processes.

Open Source

Open Source refers to software or products whose source code is made publicly available for anyone to view, use, modify, and distribute. This promotes collaboration and transparency within the development community.

One-Pager

A Onepager is a concise, single-page document used to summarize key information about a product, service, or business. It is often used for pitching ideas to potential investors, partners, or customers, offering a quick overview of the value proposition, mission, and goals.

P

Pitch Deck

In a pitch deck, founders briefly and concisely summarise the most important content from their business plan on a few slides. With the pitch deck, the founders can then present their startup convincingly to potential investors - in other words, pitch.

Pivot

Strategic change in a start-up’s focus or approach based on feedback or market conditions.

Product Market Fit (PMF)

Validating the product-market fit (PMF) is the most important milestone for a start-up. It is proof that a product has reached sufficient development maturity for the market to want it. Before the PMF, founders focus exclusively on customer research and product development.

Product Roadmap

A product roadmap is a popular project management tool for start-ups. Founders and their team use it to determine how product development is to be prioritised and the product vision implemented. The product roadmap contains all important information about the product or project and its development over time - the overview is usually divided into weekly steps.

Q

Quantitative Research

Quantitative Research involves gathering and analyzing numerical data to understand patterns, customer behaviors, or market trends. It’s used by start-ups to make data-driven decisions and validate hypotheses.

Qualified Lead

A Qualified Lead is a potential customer who has shown interest in a product or service and meets certain criteria (e.g., budget, authority, need, timeline), making them more likely to convert into a paying customer.

Quick Pivot

A Quick Pivot is when a start-up changes its business model, product, or target market quickly in response to market feedback or challenges. Start-ups need to be agile and adapt fast to survive and thrive.

Quick Wins

Quick Wins are small, easily achievable successes that can deliver immediate results and help build momentum for a start-up. These quick achievements often boost morale, demonstrate progress, and provide tangible outcomes that can attract investors or customers.

R

Revenue Streams

The source of income a business earns from its various activities or offerings. Found in the Business Model Canvas, they represent key components of monetization strategies.

Return on Invest (ROI)

A measure of the profitability of an investment, calculated as the ratio of net profit to the initial investment cost.
Critical for assessing investment viability, both for investors and internal decision-making.

Rapid Prototyping

The process of quickly creating a scaled-down version or model of a product to test and iterate on its design. A cornerstone of lean start-up methodology for minimizing waste and refining product-market fit.

S

SAM

Serviceable Available Market refers to the portion of the TAM (Total Addressable Market) that a company can realistically target with its current products, services, and geographical reach. It takes into account practical constraints like market readiness, distribution capabilities, and regulatory restrictions.

SOM

Share of Market (or Serviceable Obtainable Market) is the portion of the SAM that a company expects to realistically capture within a specific timeframe. It reflects achievable market penetration based on factors like competition, pricing strategy, and operational capacity.

Stakeholder Management

Process of building relationships and managing expectations with individuals involved in the business.

Seed Funding

Initial round of funding to support early development before larger investments.

T

Total Addressable Market (TAM)

Total revenue opportunity available if a product achieves 100% market share.

Term Sheet

A preliminary, non-binding agreement that outlines the terms and conditions under which an investment will be made.

A key step before finalizing funding. It includes valuation, equity percentages, board composition, and veto rights. Example: A seed-stage start-up might negotiate a term sheet offering $1 million for 15% equity.

Technology Readiness Level (TRL)

A scale developed by NASA to assess the maturity of a technology, ranging from basic research (TRL 1) to full deployment (TRL 9). Often used in science-based start-ups.

U

Unicorn

A start-up with a valuation of over one billion USD - before a possible IPO or exit of the company.

Unique Selling Proposition

Key aspect of a product or service that sets it apart from competitors.

User Persona

Profile of a typical user created to guide product and marketing strategies.

Upselling

A sales technique that encourages customers to purchase higher-end or additional products or services. A vital strategy for increasing revenue without needing to acquire new customers.

V

Value Proposition

A statement that clearly explains how a product or service solves a customer’s problem and delivers unique benefits. It’s a core part of a start-up’s identity, used to attract customers and investors.

Often created during the Business Model Canvas process to clarify how the start-up differentiates itself.

Venture Capital

Venture capital describes a sub-sector of the private equity business in which a private equity company invests in an unlisted company and profits from its profits.

Valuation

The process of confirming that a business idea, product, or service meets the needs and expectations of its target audience. Validation minimizes risks and ensures product-market fit.

Value Chain

A Value Chain refers to the full range of activities and processes a company undertakes to create and deliver a product or service, from sourcing raw materials to production, marketing, distribution, and customer support. Each step aims to add value and increase efficiency to enhance the final offering.

W

Word of Mouth

Word of Mouth is organic, unpaid promotion that occurs when satisfied customers share positive experiences about a product or service, often crucial for start-up growth.

Whitelabel

A Whitelabel product or service is created by one company and rebranded or sold by another, allowing start-ups to quickly enter markets without developing their own solution from scratch.

Warm Introduction

A Warm Introduction occurs when a mutual connection introduces you to a potential investor, partner, or key contact, increasing the likelihood of engagement and trust compared to a cold outreach.

Wireframe

A Wireframe is a basic visual blueprint or layout of a digital product, such as a website or app, used in the early design stages to map functionality and structure without detailed design elements.

X

X-Factor

The X-Factor refers to a unique, standout quality or characteristic that makes a start-up or product exceptional and difficult to replicate, often contributing to its success.

Y

Yield

Yield refers to the return on investment (ROI) generated from an asset or activity. In the start-up context, it often refers to the revenue or profit gained from marketing campaigns, product sales, or investments.

Year-over-Year (YoY)

Year-over-Year is a financial comparison between one period (usually a month or quarter) and the same period in the previous year. This metric is often used to assess growth, performance, and trends over time.

Yellow Flag

A Yellow Flag refers to a potential warning sign or early indication of a problem within a start-up, such as declining performance or customer dissatisfaction, which needs attention but is not yet critical.

Z

Zero to One

Zero to One refers to creating something entirely new and innovative, rather than just improving an existing product. It’s a term often used in the context of building groundbreaking businesses or technologies

Zoom-in-Strategy

A Zoom-in Strategy is when a start-up refines its focus on a specific aspect of its business or product after broadening its scope, in order to find the most viable market segment or solution.

Zero Burn Rate

Zero Burn Rate means a start-up is not spending more money than it earns, indicating financial stability. It’s a crucial goal for start-ups to achieve sustainability without running out of cash.

Zero Waste

Zero Waste refers to a sustainable philosophy and strategy aimed at reducing waste to as close to zero as possible by minimizing resource use, reusing materials, and recycling. In the start-up world, companies embracing Zero Waste aim to reduce their environmental footprint and create eco-friendly products or processes.