Startup Terms & Definitions

A single product capability so disproportionately valuable that it makes switching to your startup a no-brainer, even if the rest of the product is mediocre.

Data you collect directly from your users or customers — like email, behavior, and transactions.

Account-Based Marketing — a GTM strategy that targets high-value accounts with personalized campaigns.

A time-bound startup program that provides mentorship, seed funding, and access to investors in exchange for equity.

Value that grows over time — savings, efficiency, or revenue that builds your case as indispensable.

Annual Contract Value — the average value of a customer's contract, normalized over one year.

A trusted guide who helps a founder navigate strategy, capital, or scale without daily execution.

Describes AI tools that operate semi-autonomously — capable of reasoning, taking actions, and chaining steps to reach goals.

Artificial General Intelligence — a theoretical AI that can learn and perform any intellectual task a human can. Not real yet, but the long-term goal.

A flexible software development approach that emphasizes collaboration, iterative progress, and responsiveness to change.

Artificial intelligence systems used to automate, predict, or personalize in the startup stack.

Strategic relationships that expand reach, credibility, or capability.

Data insights that drive product, growth, or decision-making loops.

An individual who invests personal funds in very early-stage startups, often before institutional VC is involved.

Application Programming Interface — a way for different software systems to talk to each other programmatically.

A design approach where your product is built to be accessed via APIs from day one — common in SaaS and platform models.

Annual Recurring Revenue — the predictable yearly revenue from subscriptions or contracts.

The process of identifying which channels or campaigns contributed to a conversion.

Business-to-Business — a business model where a company sells products or services to other businesses.

Business-to-Consumer — a business model where a company sells directly to individual customers.

A cultural or leadership value where speed is favored over deliberation — essential in early-stage startups.

A governance seat influencing strategic direction and protecting investor interests.

A formal position on your startup's board of directors, typically granted to lead investors or key stakeholders.

A short-term round of funding meant to extend runway until the next larger round (usually a SAFE, convertible note, or loan).

The rate at which your company is spending money each month.

Capitalization Table — a spreadsheet showing who owns what % of a company, including investors, founders, and employees.

Chief Financial Officer — oversees budgeting, cash flow, and fundraising strategy.

A group of users, stakeholders, or buyers who advocate for your product inside an organization.

A pathway to acquire or serve customers—sales, partnerships, platforms.

The percentage of users or customers who stop using your product or cancel their subscription over time.

Continuous Integration / Continuous Deployment — automating code integration, testing, and release workflows.

The initial period (usually 12 months) before any equity vests for a new hire.

The percentage of sales opportunities that convert into paying customers.

A sounding board focused on the founder's clarity, resilience, and decisions.

Meeting regulatory or security standards to enable trust or enter markets.

A profile tool that shows how you naturally act and solve problems — your instinctive operating style.

An external specialist brought in to solve or accelerate a defined scope.

How much of your product gets used—tied to value, engagement, or revenue.

The amount of text (in tokens) the model can consider at once. Bigger context = longer memory, more nuanced output.

The 3-5 KPIs that define success for growth, product, or retention.

A part of the business that consumes money without directly generating revenue.

Commercial Off The Shelf—buy instead of build software to go faster.

Customer Relationship Management — software that tracks and manages your interactions with leads and customers.

How well a candidate aligns with your startup's values, mission, and team dynamics.

The total cost of acquiring a new customer, including marketing, sales, and other related expenses.

Willingness of a user to stick, rebuy, or refer—proof of product trust.

Operational use of data inside the product UX, not just dashboards.

Daily Active Users — the number of unique users who engage with your product each day.

Moments in product that surprise users and drive engagement/retention.

The actual benefit the user gets—not promised, but experienced.

A live or recorded walkthrough of your product given to a prospective customer.

Getting your product live in customer environments—cloud, on-prem, hybrid.

The culture and practice of combining software development and IT operations for faster delivery and reliability.

A principle where team members can challenge a decision, but once it's made, everyone aligns and executes.

Founders' trap of doing work that looks like progress but isn't.

The cascade of effects or integrations triggered by your product.

A clause in investor agreements allowing majority shareholders to force minority shareholders to sell in an acquisition.

Direct-to-Consumer — a brand or product that sells directly to end customers without relying on retailers or wholesalers.

A user who takes a chance on new products before mainstream validation.

A framework that emphasizes proving your value and building credibility before asking for investment or customer commitment.

Unit cost decreases as volume increases—critical to margins.

The interconnected players and tools around your startup or sector.

Operating with max output per effort—after product-market fit.

Turning text into a vector of numbers so models can search, compare, or cluster meaning — used in RAG, search, and similarity tasks.

Stock options or shares given to employees as part of compensation.

Employee Stock Option Plan — the program startups use to grant equity to employees.

Earn The Right—prove traction before expanding resources or markets.

A user or team member who passionately promotes your startup externally.

Focus on proof of progress (signals) before big wins (results).

Where you try cheap tests to prove or kill ideas fast.

A conative style — you thrive on research, information, and detailed analysis before acting.

Reputation, credibility, or social proof that signals you as someone worth betting on.

Product capabilities—often overbuilt, rarely the main value.

User input that shapes product, growth, or retention automatically.

A prompt strategy where you show the model a few examples to guide its response structure or tone.

Training a model further on your own data — helps it learn your tone, domain, or specific outputs more precisely.

Startup shorthand for goals that are specific, measurable, and momentum-driving — not vague aspirations.

A conative style — you love structure, sequencing, and reliable processes.

The person who starts and leads the startup from 0 to traction.

When a founder's personal beliefs or optimism override objective decision-making.

A framework to help prioritize decisions during chaos by balancing intuition, data, and risk.

Belief that vision equals value without validation.

The alignment between a founder’s natural instincts and the specific demands of the startup they’re building.

When the founder still drives product and GTM—not fully delegated.

Steps to prove you're solving a real, painful problem.

Anything that slows a user from getting value—signup, UX, pricing.

External capital to accelerate learning, hiring, or GTM.

A visual model of your customer journey — from awareness to conversion to retention.

The sweet spot where a founder has just enough traction or credibility to raise interest and funding.

Go-To-Market—how you acquire, convert, and retain customers.

When a model generates a confident but false or made-up answer — common risk in LLMs.

Insert yourself into industry conversations or narratives.

Ideal Customer Profile is the archetype of a customer who gets maximum value from your product that you can actually access, will pay, and can close.

A conative style — you like building, touching, testing, and bringing ideas into the physical world.

A longer-term support system for early-stage startups that offers resources, workspace, and guidance, typically pre-investment.

The act of running a model to get a prediction or output. Every AI response you get is an inference.

Connections to other tools or platforms your customers already use.

A structured message sent regularly to investors or advisors, summarizing progress, metrics, asks, and challenges.

In The Building—internal buy-in from the customer org.

Internal + Ready To Buy—decision-maker + budget alignment.

Key Performance Indicator — a measurable value that tracks progress toward a business goal.

The time delay between a user action and system response — critical for performance.

A person or company who has expressed interest or fits your ICP — not yet qualified.

Scoring if a lead is likely to buy and worth pursuing.

A methodology that focuses on building a product iteratively based on continuous user feedback to reduce waste and accelerate learning.

The total revenue a business can expect from a single customer throughout their relationship.

Large Language Model — a class of AI trained on massive text data to predict and generate human-like text.

Letter of Intent — a non-binding agreement showing that a customer or partner is seriously interested in your solution.

The ratio of customer lifetime value to acquisition cost. >3:1 is considered healthy.

How easy it is to reach and sell to your target segment.

How much of the total market you own—usually % of revenue or users.

Proof real people in a real market want what you're building.

Monthly Active Users — the number of unique users who engage with your product each month.

Minimum Delightful Product — an early version that not only functions but sparks joy or surprise, creating user retention and advocacy.

Systematic way to learn from metrics and act on them.

Someone ahead of you helping you avoid landmines and think sharper.

An architectural approach where a system is split into independent, loosely-coupled components that communicate via APIs.

A product or feature that's essential to a customer's operation — turning off would break their system.

An AI system trained to predict, generate, or classify data. In startups, this usually refers to a foundation model like GPT or a fine-tuned version.

A single, tightly coupled application where all components are built and deployed together.

Monthly Recurring Revenue — the total predictable revenue you expect to earn each month.

Minimum Viable Offer—first thing you can sell that proves real value.

Minimum Viable Product — the smallest version of a product that can be tested with real users to validate core assumptions and gather feedback.

Funding that doesn't require giving up equity — e.g., grants, revenue-based financing, or loans.

Net Revenue Retention — how much revenue you retain from existing customers, accounting for upgrades, downgrades, and churn.

The skill of addressing a prospect's concerns in a way that re-aligns them with the value of the product.

How well you can see into your system's behavior and performance.

The first user experience that drives activation or abandonment.

The single number that reflects your current startup stage's success (e.g., activation rate, retention).

One Page Project Manager — a visual tool that maps goals, tasks, risks, and KPIs into one simple page.

Platform as a Service — tools that help developers build, host, and scale applications without managing infrastructure.

A must-have solution to a painful, urgent problem.

An external org that helps you sell, integrate, or grow faster.

The number of months it takes to recover your CAC from a customer's revenue.

Other founders at your level—critical for sanity and signal.

Archetypes of your ideal users to design and sell better.

The set of sales opportunities at different stages from lead to close — usually visualized as a funnel.

A sharp change in product, customer, or GTM based on new learnings.

A tiny piece of code embedded on your site to track user actions for ad targeting.

Product-Led Growth — a growth strategy where user acquisition, expansion, and retention are driven by the product itself.

A framework for analyzing the competitive forces in an industry, including threat of new entrants, bargaining power of suppliers, bargaining power of buyers, threat of substitute products, and rivalry among existing competitors.

A fundraising round where a specific valuation is set, shares are priced, and equity percentages are locked in.

How you capture value—model, strategy, and perceived worth.

How urgent, frequent, and painful the target problem is.

Clear articulation of the user's core problem, not solution.

When product usage itself drives acquisition and retention.

When a product satisfies a strong market demand, evidenced by strong user growth, retention, and revenue.

Move fast, learn, improve—don't wait for perfect.

The input you send to an AI model. What you say shapes what the model does — prompts are the new programming.

Potential customers in your funnel, not yet converted.

A lead that meets your criteria for readiness to buy.

A conative style — you prefer fast action, experimenting, and adapting on the fly.

Retrieval-Augmented Generation — an AI method where the model pulls live external data to answer questions more accurately.

A metaphor for being in the worst startup quadrant: no traction, no fame — just an idea with no proof.

Showing ads to users who've visited your site or taken a specific action, reminding them to come back.

How well you keep users over time—proof of value.

Likely redundant—use 'retention'.

A choice you can easily undo—bias toward action.

Your product development plan.

Ready To Buy—buyer has budget, authority, and urgency.

How many months your startup can survive before running out of cash at your current burn rate.

Software as a Service — software that's hosted online and accessed via subscription instead of being installed.

Simple Agreement for Future Equity — a founder-friendly legal doc that lets startups raise money without setting a valuation.

Sales team drives growth through outbound and deal closing.

Different ways you reach and close customers—direct, reseller, etc.

Serviceable Available Market — the portion of the TAM your startup can serve based on product, geography, or ability to reach them.

Growing efficiently without breaking the system or value.

The boundaries of what you will and won't do in a feature or phase.

A framework within Agile that structures work into sprints (usually 2–4 weeks) with defined roles and ceremonies.

A unit of user access—often tied to pricing in SaaS.

The first formal round of equity fundraising, typically following angels or accelerators, used to validate the core business.

Search Engine Optimization—driving organic traffic and visibility.

The first institutional round after seed — used to scale product, grow revenue, and expand team aggressively.

A clue that something's working—early traction, user behavior, etc.

Multiple indicators of traction or fit—used for prioritization.

Service Level Agreement—your uptime/support commitment to users.

Framing your product as the best solution to a known problem.

Serviceable Obtainable Market — the realistic percentage of SAM your startup can win based on your execution and resources.

Sales Qualified Lead — a lead that has been vetted and is ready for a sales conversation.

How many steps a customer would go through before they would cut or replace you. The fewer, the riskier.

How often users come back—proof of habit or reliance.

The path to win based on your strengths, market, and insight.

Ownership you earn by working, not investing cash.

The effort, time, or risk to change tools—can be a moat.

Consistent, disciplined operations that compound progress.

Total Addressable Market — the total revenue opportunity available if everyone who could use your product did.

Total Contract Value — the total revenue from a contract, including all upfront and recurring charges.

How your tech makes it hard to leave—APIs, data, behavior.

Traction is real-world proof that people want what you’ve built. Measured by usage, revenue, or momentum that investors can’t ignore.

The reputation and social proof that makes people buy or join.

The percentage of time your system or product is operational and available to users.

The guided experience that turns signups into active users.

What the user produces with your tool—often the value.

The sequence of steps that add value in your market.

How you generate outcomes that matter to users/customers.

Venture Capitalist — an investor or firm that provides capital to startups in exchange for equity, aiming for high-return exits.

The timeline over which equity granted to an employee becomes theirs.

A list of users who've expressed interest in your product before launch — early signal of demand.

Contracts that give an investor the right to buy shares at a specific price later, often used in debt or convertible instruments.

That single experience where the user gets the magic.

Placeholder—replace 'xxx' with product, sales, or community.

Y Combinator — the most prominent accelerator in the world, known for backing Dropbox, Airbnb, and Stripe.

The exact projected date when your startup will run out of money. The most important calendar event in any early-stage startup, critical for fundraising and runway planning.

Prompting a model with no examples — relying entirely on its pre-trained knowledge.