Are you a startup founder looking to raise funds? Many new founders struggle with startup financing. One of the reasons is that they are not aware of the jargon and the lingo to be used. Simply put they don’t know the language of the startup community. This can make it difficult to communicate with seasoned entrepreneurs and investors. Go through these startup funding terms that you should know at the ideation stage to give you a head start. So review this glossary of words, and you’ll impress the investors with your advanced knowledge and make them more confident in your startup! Given below are the Startup Funding Terms to know.
IDEATION STAGE
At this stage, an early-stage startup creates a business plan succinctly explaining the product or service to customers.
Ideation Stage
In layman’s terms, the Ideation stage is nothing but bouncing off ideas in process of identifying the problem that needs to be solved. This is where we understand the pain points of the consumer and come up with solutions.
Target Market
Target Market signifies identifying the consumers or customers who will consume your service or product. Segregation of the consumer base is done as per Demography, economic condition, gender, spending power, education, and lifestyle.
Startup Capital
Startup Capital is identified as the funds required to kick start your business. These funds can come from your personal savings, or as loans from your friends, family, and relatives.
Key Performance Indicator (KPI)
Key Performance Indicators or KPIs are metrics that every startup founder should track. It is a measurable value that showcases just how effectively a company is achieving the set business objectives. Startups and established businesses use KPIs to evaluate their success at reaching targets.
Minimum Viable Product (MVP)
MVP is an abbreviation for ‘minimum viable product‘, and refers to the initial stage of creating the first workable (and saleable) version of your new business concept. It’s a concept that comes from a book called ‘The Lean Startup’ by Eric Reis and the basic principle is relatively simple. The purpose of using an MVP is to test and pivot quickly as per learnings from your customer feedback.
Business Model
A business model describes how a startup creates, delivers, and captures value, in economic, social, cultural, or other contexts. The process of business model construction and modification is also called business model innovation and forms a part of a startup business strategy.
Profit Margin
Profit margin gauges the degree to which a company or a business activity makes money, essentially by dividing income by revenues. Expressed as a percentage, profit margin indicates how many cents of profit has been generated for each dollar of sale.