Indian startups are sweeping the globe. Here are some words you should be familiar with if you want to jump on the bandwagon of aspiring entrepreneurs.
Employment is a thing of the past. Young people today desire to be their own bosses and dabble in entrepreneurship. In the past ten years, India has developed into a hub for startups. With more than 86,000 startups and 115 unicorns, we have the third-largest startup ecosystem in the world. If you aspire to launch your own business, you need be conversant in startup jargon. You should be familiar with terms related to business strategy, funding options, and exit strategies. We will teach you to fundamental startup lingo in this article so that your journey will go smoothly.
Are you prepared to begin?
Business strategy
1. “Every road will lead you nowhere if you don’t know where you are going.” H. A. Kissinger A business plan is necessary for any new venture. It is a document that explains the company’s objectives, vision, and mission as well as its market strategy, approach to conducting market research, and projected financial results. It’s also possible to name key players who are responsible for obtaining them. A business strategy provides significant insights into the future of the organisation. Having a beginning business plan is essential for your success, whether you’re looking for funding or to entice top talent.
2. Deck A written, graphical summary of your business plan is called a “deck” or “pitch deck.” Typically, you may use a presentation to explain to potential investors what your startup is all about and why they ought to fund it. A pitch deck should be succinct, detailed, and persuasive so that clients and investors can quickly grasp the essence of your startup and the benefits of working with it. It usually has 10 slides or less and covers every important facet of your startup.
3. Self-starting Every startup needs cash to get off the ground, whether it’s for developing its personnel or placing products on store shelves. When a startup uses bootstrapping, its founders, friends, and family provide the funding. It might be considered self-funded. Most startups often finance the initial phases through bootstrapping. The immensely successful startup in Indian stock trading, Zerodha, is an example of a company that has maintained its bootstrapped model.
4. Investing in angels An angel investor is a wealthy person who invests their personal funds in a firm. They make an investment in a startup with the intention of profiting from a startup exit. Angel investment entails lending one’s personal money to a startup in exchange for stock or as debt in order to support its expansion. Angel investment can benefit your startup not only financially but also because the investors have a solid network that you can use to expand your business.
5. Investment capital You should be familiar with the phrase “venture capital,” also known as VC. Venture capitalists (VCs) are businesses or groups of people who make investments in high-growth enterprises in order to make money. You receive funding from VCs in exchange for equity in this type of private equity financing. Similar to angel investments, venture capital has a tonne of benefits like advice, mentoring, and networking possibilities.
6. Appraisal Simply put, valuation refers to the value of your business. You must be aware of your company’s pre-money valuation before approaching an investor. Your company is worth this prior to investment. Post-money valuation describes the value of your firm after receiving funding. Typically, a startup’s revenue and growth prospects are used to determine its value.
Seed round 7. The first formal round of funding a startup receives is known as the seed round and is also referred to as seed funding or seed capital. It is frequently used to refer to the initial round of venture capital, but it can also refer to angel financing, crowdfunding, or even money from friends and family for a firm.
8. Startup exit strategy Every entrepreneur sets up a business with the aim of making money. A startup exit strategy is how an investor, venture capitalist, or you as a founder, plan to sell the business to clock in a profit. It involves deciding how you want to exit the startup, when and what levels of valuation. You could sell to another founder, take your startup public through an Initial Public Offering (IPO) or go in for a merger.
9. Minimal Viable Product The first version of the product a startup plans to market is called an MVP, or minimum viable product. A minimum viable product (MVP) only contains core or important functionality. It is utilised to quickly and cheaply test a product to evaluate how well it will sell. To construct better versions with more sophisticated features in the future, it is intended to test the most dangerous assumptions.
10. Burn rate One of the key startup buzzwords to understand is burn rate. It refers to how much cash your firm will expend or “burn” over the course of a certain amount of time, like a year. Startups typically spend a certain amount of money up front before becoming profitable. Before investing, investors will want to know your startup’s burn rate. A burn rate that is too high can discourage investors.
11. Unicorn A unicorn is a startup with a $1 billion valuation. India currently boasts more than 100 unicorns, and by 2025, there should be 250.
12. Dragon A startup that raises $1 billion in a single round of funding is known as a dragon. Despite being uncommon, dragons are regarded as mega entrepreneurs. Flipkart is the most well-known dragon startup in India.
catching a wave
The startup path is one of bravery, perseverance, and flexibility, from the modest beginnings of the seed round, where ideas take root and bloom, to the high heights of unicorn status, when entrepreneurs grab the imagination of investors and society at large.
