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Basic Terms Used In The Startup world

burn rate: it is the amount the respective company is spending in order to promote their product means they do all the things like advertising, marketing ,research, and many more things to progress. Burn rate is the amount spent and it does not include profits or positive cash flow.

scaling: you have heard “The company is scalable” means it indicates the company’s growth and it also tells whether the company can sustain itself or not. scaling is like measuring each factor that a company comprised like sales, profit, negative and positive cash flow, and describe the company’s future.

value proposition: if you want to convert your idea into a business you need to know your business “value proposition” means benefits you are giving to your targeted customers and the problems your solving.

Barrier to entry : It is the very essential thing for many successful companies. If you started a business and it is making a good profit and if others try to copy your business model and start the business then how you can be a barrier to them means competitors feel it difficult to operate in that respective space. You have to be unique and have good strategies to make the barrier stronger.

Angel investor: He is an investor who invests in your company and takes the share of the company. Angle investors mainly invest in new startups at the very beginning.

Venture capitalists: these are a group of investors belonging to the same company and invest in the startups. Getting fundings from VC is very difficult because they invest in those companies which have made a pretty good amount of profits in the early stage of their business.VC invest more capital compared to Angel investor.

Bootstraping: If your company is functioning by your own money (from your friends, relatives, and parents) and it is not been funded by another company or investor then that business is called bootstrapped business.

Pivot : If the companies did not make the expected amount of profit and their service can not reach a huge audience and the company starts to pivot means changing the idea and business model to generate huge revenue.

unicorn: The company whose valuation reached to one billion dollars those companies are called as the unicorn.

CAC : cost acquisition cost tells how much of the amount that you spent to get a targeted customer.

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