Before you can walk the walk, you need to talk the talk – the vocabulary, acronyms, even the slang used by fellow entrepreneurs and seasoned business professionals.
Whether you have just started an enterprise course and are still searching for that bright idea, or you’re tweaking your investment pitch in readiness for your first round of funding (fingers crossed), it pays to be in fluent in business jargon.
Crowdfund Campus introduces the sayings and phrases all wannabe entrepreneurs need to master. Game on.
The Entrepreneur’s Phrasebook: A-M
Acquisition. Taking ownership of another business. Often used in the context of a ‘merger and acquisition’ (M&A) when one company purchases another.
Advertising. A means of attracting public attention by paying for announcements about your service or product in print, broadcast or online media.
Angels. People who support a startup financially in its early stages, using their own private capital.
Annual Recurring Revenue (ARR). A measure of predictable and recurring revenue streams, such as a subscription or regular service. Typically informed by ongoing MRR (Monthly Recurring Revenue).
Appraisal. A formal estimate of the value of something on the open market. Also used within the workplace to describe the annual review of an employee’s performance.
Barter. The direct exchange of goods or services between businesses, without using a medium of exchange (i.e. money).
Bootstrapping. Funding a company with your own personal resources or its existing revenues. A bootstrapped business is one which is grown without external input.
Burn Rate. The speed at which a company spends its capital, usually measured over the course of a month. Typically applied to startups to track the amount of money being lost before the business becomes profitable.
Cocktail Pitch. A succinct overview of your business that informs and intrigues in a single sentence. Useful to have up your sleeve for networking events.
Copyright. Legal protection granting the creator of original literary, musical or artistic work exclusive rights to its use and distribution for a defined period.
Corporation. A large body that is recognised as a legal entity with its own rights, privileges and liabilities distinct from those of its members. It is advantageous for big businesses to be incorporated as this status protects investors from personal liability should the corporation experience losses.
Decacorns. Companies valued at over $10 billion, such as Snapchat and Uber. The term was coined at tech industry gatherings in London and San Francisco, spawning a creature that is even more mythical than the unicorn (the creature used to represent companies that quickly achieve a $1 billion valuation).
Dragon. Dragon companies grow so successfully that they are able to return all their investment money. Stats suggest that only one in four unicorns are dragons, hence the Silicon Valley saying, â€œUnicorns are for show; dragons are for doughâ€.
Due Diligence. The process of obtaining complete and accurate information about a business in order to establish its assets and liabilities, and evaluate its commercial potential. Undertaken by any prospective buyer and/or investor.
Elevator Pitch. A short introduction to your business, theoretically delivered in the time it would take to ride a lift. In reality they tend to last around 5-10 minutes.
EBITDA. Or, in full, ‘Earnings Before Interest, Tax, Depreciation and Amortisation’. The acronym – and practice – was coined in the 1980s by city firms mounting buyout bids as a way of measuring real profits. By stripping out the expenses that can muddy a company’s day-to-day performance, investors can measure how much money a young company is actually making.
Exit. The act of getting out of your business, whether by selling, merging, floating on the stock market, or closing. Most entrepreneurs plan their exit strategy from the early days as something to aim towards.
Gazelle. A high-growth company with revenues that increase by at least 20% annually, over a period of four years or more.
Hockey Stick. The shape of the growth curve all entrepreneurs and investors want to see, as it demarcates a company that doubles sales every year.
Home Run. When an exit returns twenty or more times investors’ initial capital. Another sporting metaphor that proves it pays to keep your company in shape.
Incubator. An enterprise that offers workspace, coaching, and support services to startup and early stage companies, intended to speed up their growth and success.
Joint Venture. An enterprise set up by two or more parties who share the profits and losses, but otherwise retain their distinct identities and personal liabilities.
Limited Company. An incorporated, legal entity which has assets independent of its owners or investors. The owners/investors are not, therefore, personally liable for the firm’s debts. Limited companies can be privately owned (ltd) or public (plc), with the latter offering shares on the stock exchange.
Limited Partnership. A business model that draws on elements of both a limited company and a joint venture. Usually formed by at least one general partner (responsible for the day-to-day operations) and one limited partner (who cannot control or participate in the management of the partnership, but is only liable up to the sums invested). A limited partnership does not form a legal entity that is separate and distinct from its owners.
Marketing. The umbrella term for a broad range of practices and strategies – advertising, PR, promotions, pricing, packaging, distribution – that aim to enhance sales of a product or service.
Merger. The joining together of two previously separate companies. A true merger – rather than acquisition – is when both businesses dissolve and set up as one newly formed entity.
We hope this entrepreneur’s phrasebook will help you feel confident when discussing your business with investors and interested parties, whether on campus via our revolutionary Sandpit model or out and about at networking events. Be sure to check back next month when we conclude our countdown with letters N-Z.