Startup glossary

The words you'll hear when you start building, explained simply.

Accelerator: A short, structured program that helps startups grow fast, usually in exchange for a small share of the company.
Angel investor: A person who invests their own money in very early startups, usually in exchange for a small share of the company.
ARR (annual recurring revenue): The yearly value of subscriptions or contracts that renew automatically. If 100 customers each pay ₹1,000 a month, ARR is ₹12 lakh.
Bootstrapping: Building a company with your own money and its earnings, instead of raising outside investment.
Build in public: Sharing what you're building, what you learn and how it's going, openly and as you go.
Burn rate: How much money a company spends each month beyond what it earns. If you spend ₹5 lakh and earn ₹2 lakh, you burn ₹3 lakh a month.
Cap table: A table showing who owns what share of the company: founders, team members and investors.
Churn: The share of customers who stop using or paying for your product in a given period.
Cliff: A waiting period, often one year, before any vested shares are earned. Leave before the cliff and you keep none.
Co-founder: Someone who starts the company with you and shares ownership, risk and big decisions from the beginning.
Customer acquisition cost (CAC): What it costs, on average, to win one new customer, including ads, sales time and offers.
Dilution: When new shares are issued, for example to investors, so everyone's existing percentage gets smaller.
Equity: Ownership in a company, usually as shares. Owning 10% of the equity means owning 10% of the company.
ESOP (employee stock option plan): A pool of shares set aside so team members can earn ownership, usually over time through vesting.
Founders' agreement: A written agreement between co-founders covering ownership, roles, vesting and what happens if someone leaves.
Go-to-market: Your plan for reaching your first customers and getting them to use and pay for the product.
Incubator: A program, often at a college or institution, that gives early founders mentoring, workspace and sometimes small grants.
Lifetime value (LTV): The total money you expect to earn from one customer over the whole time they stay with you.
MRR (monthly recurring revenue): The monthly value of subscriptions or contracts that renew automatically.
MVP (minimum viable product): The simplest version of your product that lets real users try the core idea, built to learn as quickly as possible.
Pitch deck: A short slide presentation that explains your startup to investors or partners.
Pivot: Changing a big part of your plan, like the product, the customer or the business model, based on what you learned.
Pre-seed: The earliest stage of funding, often from founders, friends, family or angels, to build a first version.
Product-market fit: When a product clearly meets a real need, so customers keep using it, pay for it and tell others without being pushed.
Runway: How many months a company can keep going before its money runs out at the current burn rate.
SaaS (software as a service): Software people pay for on a subscription and use online, instead of buying it once.
Seed round: An early round of funding used to find product-market fit and build the first team.
Side project: Something you build in your spare time alongside a job or studies. Many startups begin this way.
Term sheet: A short, mostly non-binding document listing the main terms of an investment before the final legal papers.
Traction: Proof that people want what you're building, such as active users, revenue or growth over time.
Valuation: What a company is considered to be worth, usually agreed between founders and investors in a funding round.
Vesting: Earning your shares over time instead of all at once, so someone who leaves early doesn't keep a large stake.

New to this? Start with how to find a co-founder or startup ideas for students.