Means you offering a “Business To Business” product or service to other companies. 

Means you offer your products or services to other consumers "Business To Consumer". 

Setting Up Your BAIL Team

A bubble describes a moment in an economic cycle. Bubbles burst, meaning that the moment will end and that end should be anticipated.

Business Advisors provide guidance to companies in a variety of capacities. Business advisors might be investors, serial entrepreneurs, or seasoned experts in a specific field. The common theme is that they know a whole lot and can be hugely valuable to your company.  

The annual percentage rate at which customers stop subscribing to a service or employees leave a job. 

Used to protect your creative content.

Customer discovery doesn’t mean looking for customers, but rather identifying who the right customer is for your product while simultaneously finetuning your offering to suit their needs. At this stage you are testing assumptions and hypotheses to validate the customer you’ve identified and their “problem” or need. 

An expression that is frequently used in marketing to describe the age, gender, income, schooling and occupation of your ideal customers. 

Forces consumers to think differently and then adopt that technology as the new norm. Examples include Uber, Lyft, Airbnb.

The first users of your product. They will typically be key influencers and active on social media. They will give you your most honest and sometimes overly direct feedback. If you can identify these people effectively and have them interacting with your startup from an early stage, you can get lots of free exposure. 

Someone inside your organization who is your number one fan. They love your company so much that they often go above and beyond their expected role to help promote your company. If you find an evangelist, hire them! 

"Intellectual Property" covers patents, trademarks and copyrights. It is a good way to protect your “secret sauce”. 

Means to try something, refine it, try again and keep trying using small steps until successful. 

Launched with as little startup capital as possible while getting data that can be used to improve the product. Speed is the key factor here. 

A business arrangement where a company sells the right to use their IP to another company to use its brand (trademark), copyrights, or a specific technology, usually patented or protected by trade secrets.  

Pricing is using deliberately low pricing to gain market share. The key here is to tempt your users with the low price or free offer and once you have acquired them, focus on how you can get repeat business from them. 

This compares the lifetime value (LTV) of a customer to the cost to acquire them (CAC). A good explanation is given by Ande Lyons.

A measure of how much a product or service is being used by customers compared to the total estimated market for that product or service. Market penetration also relates to the number of potential customers that have purchased a specific company's product instead of a competitor's product.

The action or activity of gathering information about consumers' needs and preferences. This can mean many different things, often the most simple research is the best: find your potential customer, ask them if they'd buy your product/service and what they would pay for that service. When developing a business plan you may want to do historical research to support explaining why you have chosen to build the business. Template: Free template from Hubspot 

Used to protect your design.

If you’ve done the work of customer discovery you may end up determining there is a big enough market or demand for your product or service. Or, you could end up deciding your idea or product is not worth pursuing further.

The segment of the TAM targeted by your products and services which is within your geographical reach.

To grow or expand in a proportional and profitable way.

Someone who launches a number of businesses either simultaneously or one after another.  

The portion of SAM that you can capture.

The total market demand for a product or service.

A target market is a group of customers with shared demographics who have been identified as the most likely buyers of a company's product or service. Identifying the target market is important for any company in the development and implementation of a successful marketing plan.

These companies are not the same as “tech companies” because the product or service is powered by another already existing platform or technology (i.e. the internet). Companies that don’t create new technology, but leverage existing technology to provide a platform or service.

Proof that your hypothesis is working. People are actually buying your product or using your service.  

Used to protect your brand.

What makes your business uniquely attractive. Also known as USPs (Unique Selling Points).

Individuals with a degree of personal wealth, who invest in early-stage companies. They usually come along at an earlier stage of the business, and since their risk is greater than other investors, they typically invest smaller dollar amounts. They are generally accredited investors, as determined by the SEC.

A statement of a company’s financial situation at a single point in time.  

(One of the most common expressions in the startup world.) Bootstrapping is a term used in business to refer to the process of using only existing resources, such as personal savings, personal computing equipment, and garage space, to start and grow a company. This approach is in contrast to bringing on investors to provide capital, or taking on debt to fund a business’ expansion.

A short-term loan from investors to hold you over until the next round of funding or more capital can be secured. 

How fast you go through cash. The majority of startups lose money before they break even and then eventually make a profit. 

A convertible note - or convertible debt - is a kind of loan that can be issued towards a round of future funding. A convertible note has an interest rate and maturity date, like a loan. Both a SAFE (similar, but different) and Convertible Note are designed to convert to equity when the company raises more money (how much is negotiated).

This investment is coming from within a corporation, and it could also include industry insights and connections. Beyond equity, the CVCs may be looking for a collaboration agreement or they may see your company as an acquisition target.

Asking the public for funding (there are various websites that help with this). You may or may not offer equity in exchange. Disadvantages could include theft of your idea, loss of reputation if things go awry with your company, or the inability to crowdfund again in subsequent stages of investment. 

How you plan to sell your company to give you and your investors a return on their investment. This ranges depending on the industry but a standard multiple with technology investments seems to be 10x. 

A repeat investment from a funder who previously provided capital, now at a later stage in the business.

This is mostly what it sounds like, it’s fairly common and tends to happen early on in a business venture. The “3 F’s” represent the earliest capital a new company may receive from those closest to them. The addition of “fools” refers to the high level of risk associated with this type of transaction.

An expression used by investors to describe the shape of the growth curve they want to see in businesses they invest in. They want to see their startups grow quickly and at least double sales every year.

How you make money?

A minimum viable product is the simplest form of your product. This can be used to attract Beta users/early adopters or to pitch for funding. 

The value of a company before external investments or the latest round of funding/ the value of company after external investments or the latest round of funding.

This is an investment where the valuation of the company is determined as a negotiation between the company and the investor, and includes a price-per-share so it's clear how much of the company everyone owns.

An expression frequently used by Paul Graham of Y Combinator, it means you are making just enough money to be able to pay for basic living expenses. 

When an investor puts money into a company, he wants to know what he will get out. This is called the return on investment. The investor(s) will also want to know how long it will take to get their ROI? 

Describes how long your cash will last and when you think it will run out. 

A non-debt convertible security. It will eventually convert into equity in a future investment round.

The first official round of startup funding or equity funding (selling shares or ownership). 

Series A Funding: The second stage of startup funding, but the first stage of venture capital financing.

When you give shares of your company to early employees or contractors in place of cash. This is very common in the startup world before funding arrives. If you take a chance with a scalable startup, your shares might become lucrative when the company sells.

When an investor makes you an offer to invest in your company, the term sheet is a document that outlines what they will get for what they put in — including % ownership and voting rights. 

Describes what your company is being valued at. “Pre-money valuation” is the value before you take investors’ cash. “Post-money valuation” is that amount plus the investment put in.  

Private investors or investment firms that use money from pension plans, insurance companies, and wealthy people to place bets (capital) in exchange for equity in companies they believe have lots of growth potential, usually of (planned) unicorn proportions.