The Workthere Guide To Start-up Jargon



In an ever evolving minefield of phrases and terminologies that start-ups and entrepreneurs commonly use, we have put together a handy guide to help you navigate through the lingo.

Accelerator: A location or ‘hub’ where a start-up can get help to scale their business, and put themselves in a better position for future funding.. A company will typically apply for a place within an accelerator and will usually have a set timeframe in which to grow their business. A few of the well known incubators in the UK are Rocketspace, Bathtub2Boardroom, Seedcamp and IMPACTHub

Angel Investor: An investor who injects their own capital (rather than that of a fund) into a start up for a stake in the business. This investment usually occurs after a Seed Round (see Seed Funding, below).

Boot Strap: The process of ‘bootstrapping’ involves funding a business in its early stages through the process of using savings and money from close friends and family.

Burn Rate: The rate of a company’s expenditure over a given time period, usually a month.

Bounce Rate: A measure of the percentage of website visits that ‘bounce’ away from the site having viewed no more than the welcome page. The rate is important in providing insight into any flaws of a website, whether it be in the site design or the content.

Crowd Funding: The process of increasing financial support for a project or venture via raising money from a large number of investors who each contribute a small amount.

Disrupter: An innovative idea that enters an existing market and completely changes an earlier concept or technology.

Incubator: A company that provides start-up businesses with access to a range of facilities such as office or retail space, alongside resources and development programmes. The aim of this is to help support the growth of the company and its product over a long time period.

IP (Intellectual Property): This refers to intangible property that is the result of your own creation, or having brought property rights from the creator or previous owner. Examples of this include designs, symbols, literature etc.

IPO: An initial public offering; the first time that the stock of a private company is offered to the public. A smaller younger company might look to IPO to raise capital to help its expansion, as well as larger companies looking to become publicly traded.

Multiplier: A method used to value a property. The calculation used is: Valuation= Net profit of Business x Multiple of Sector

Pre-Money: A company’s valuation prior to a round of investment.

Post-Money: This is the value of a start-up company that takes place immediately after the most recent sum of investment. This value is equal to the sum of the ‘pre-money valuation’ added to the amount of new equity from investment.

Seed Funding: The first round of funding that helps finance the initial stages a new venture. If successful, this round should hopefully be followed by an even bigger Series A round.

Series Funding (A, B & C): Start-up companies endure a series of funding from venture capital firms. In each round, valuation is done independently.

  • Series A- This is a company’s first significant round of venture funding, offered by a portfolio company. This is normally done by allotting preferred stock when the start-up business is generating revenue but may not be producing profits. It is consequently of high risk to investors.
  • Series B- This is required by the company in order to ‘up-scale’ and have a market share, with the purpose being to generate net profit levels. The risk level is not as great as the previous round A, subsequently the investment is greater.
  • Series C- A capital firm will enter this round of funding having proven its market success. The funding will be used to increase market share further, or potentially to prepare a company for an acquisition. This stage of funding acts as a strategy to exit from the venture capital firm.

A Unicorn: A start-up company valued at over $1 billion.

UX: User experience refers to the aesthetics and usability of the product and the process of improving the overall experience the customer has using a particular product.

VC Funding: Venture Capitalist funds manage money from investors whom seek private equity stakes in business that show signs of strong growth projections.