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The start-up dictionary

From Start-Up to Skin in the Game.
When start-uppers talk, there is likely to be one or two words you don’t understand. The innovative scene has its own innovative language. To get a little closer to that language, here some of the key Start-Up Words. Starting easy…
A Start-Up: young, not yet established company, founded with little capital to realize an innovative business model. Requires some venture or seed capital early on to support commercial operations.


Bootstrapping:
Founding a company by self-financing it.

Business Angel: A business angel is someone who takes part in financing a start-up, but who also shares his or her know-how and contacts with them.

Capital buffer: A capital buffer is mandatory capital that financial institutions are required to hold in addition to other minimum capital requirements.

Due dilligance: Due diligence is an investigation of a potential investment to confirm all facts, such as reviewing all financial records, plus anything else deemed necessary to check the potential success of the start-up.

Disruption: Technology or product that changes or revolutionizes a market.

Exit: Successful (part) sale of a start-up.

Financial Rounds: Investors distribute their investments at multiple stages. When the startup reaches important milestones, funds are given for the next stages.

Going Public: (Part) Sale of shares to the stock market.

Hockey stick effect: This effect describes a particular curve progression that resembles a hockey stick. The curve starts flat, maybe falls rapidly but then ramps up quickly. This happens when a start-up garners little sales at the beginning and also expects setbacks before growing strongly as time passes.

IIPR: Protection of all types of intellectual property, such as patent protection, design protection or copyright.

Joint Venture: Cooperation between two or more economically independent establishments to create a one new endeavor.

KKTI: An institution who seeks to enable the successful launch and first expansion steps of a start-up with intense coaching. Successful Start-Ups receive a CTI-Label and will be put in contact with potential investors.

Lean: The core idea is to maximize customer value while minimizing waste. Simply put, lean means creating more value for customers with fewer resources.

MVP: Minimum Viable Product, which is a product with just enough features to allow for the gathering of validated learnings, to be used for the product’s continued development.

Pivot: A radical strategic change of a business model. The vision stays the same, but there are changes to the product, the audience or a change of technology.

Quality management: Quality management is the act of overseeing all activities and tasks needed to maintain a desired level of excellence.

Royalties: A percentage of the income using the owner’s property. It is common in situations where an inventor or original owner sells his product to a third party in exchange for royalties from the future revenues it may generate.

Skin in the game: When Insiders use their own money to buy stock in the start-up they’re running. This ensures that the company is run by people who are at risk.

Term Sheet: A primary stage contract that is conditionally binding. It often includes a non-disclosure agreement and exclusivity of the agreement.

Usability: Great usability means making the product as easy as possible for the user.

Venture Capitalist: Professional investor who takes part in a startup with large investments,but also expect strong development and returns (normally 35 – 50% increase in value per year).

White Label Product: Business customers get a finished product from a company and just have to put their brand on it. It’s interesting for startups, who create products like a CMS, but can’t sell the product themselves. They just sell the CMS (Commerce management system) as a package to someone else.

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