Over the last 20 years, I've heard so many acronyms, colloquialisms, and idioms that I'm as befuddled as I am bemused. I spent five seasons behind the scenes of Dragons' Den, the Canadian version of Shark Tank, and saw dozens of aspiring entrepreneurs get shot down in flames because they failed to be clear and concise in their elevator pitch.
These flailing founders forgot the number one rule in all forms of communication: Ensure that the audience understands. Every community has its own inner dialogue, one often adopted to save time, focus a conversation, or describe a common phenomenon. Knowing these turns of phrases can give you a leg up or send you crashing down, depending on how they're interpreted.
They can also be quite funny when take out of context. Here are 22 of my current favorites:
Startup. A new venture searching for a sustainable, repeatable, scalable business model.
Founder. The entrepreneur(s) behind a startup.
Angel. A high-net worth individual that invests their own money into a startup.
VC. A venture capitalist is a professor startup investor who runs a fund primarily made up of other people money and applies a portfolio approach to investing.
Vulture capitalist. An unethical VC. Think: Sally is such a vulture capitalist. She prolonged due diligence for months just to shorten their runway so the founders would have no other choice than to take her deal.
Valuation. What a startup is worth according to its most recent funding round. Think: Uber's valuation was over $1 billion at the close of its first VC round.
Scaling. The process of replicating early startup success on a global scale.
Accelerators and incubators. An incubator is a shared work space where startups live and founders learn. An accelerator is an incubator that simultaneously invests in each startup, runs a mentoring and education program for founders and often follows a cohort model.
KPIs. A Key Performance Indicator is a crucial business metric that illustrates the progress of your business. Think: One of Facebook's most important KPIs is month over month user growth.
Traction. Arm's length evidence that your startup is moving in the right direction. Think: "Mary was happy closing her tenth sale of the week. This was the sort of traction her angel was hoping for".
Churn. A KPI that measures the net monthly loss of customers.
CAC (or CoCa). Customer Acquisition Costs (or Cost of Customer Acquisition). A KPI that tells you how much you spend (all in) to find and onboard a new customer.
LTV. Lifetime Value of a Customer is a KPI made up of the sum of all monies an average customer contributes to your business before they churn.
Burn rate. How much capital your venture consumes each month. It's the monthly difference between revenue and expenses.
Dry powder. How much capital your startup has on hand.
Runway. How long, in months, your startup has to live. Typically calculated by dividing dry powder by burn rate.
MVP. Minimum Viable Product is the first solution you launch. It needs just enough features to get users to adopt it.
Ramen profitable. Profitable enough to cover costs and basic living expenses for all employees.
Problem solution fit. An early stage startup milestone. A company hits problem solution fit when its MVP starts gaining traction with its users.
Product market fit. The last milestone hit before a startup should scale. You have product market fit when your cost of new customer acquisition is dwarfed by your lifetime value per user.
Bootstrap(ing). The process of growing your business using customer revenue instead of investor capital.
Unicorns, dragons, mother of dragons. A unicorn is VC-backed company with a valuation over $1 billion less than five years since its inception. A dragon is a unicorn with an exit so large that it generates a return high enough for investors to make up for any dogs they have backed. The mother of dragons is extremely rare--it connotes an investor who has backed multiple unicorns and had at least one dragon. Brad Feld, Fred Wilson, and Paul Graham have all earned the title.
There you have it. All true. All in use today in some boardroom, email, or conference call.
Look to your websites, emails, power points and other forms of communication. Would your grandmother understand them? Would your grandkids? If they're your intended audience, perhaps you should revise.
Jargon and slang can be fun. They offer a sense of insider-ship, like you're a member of secret club. Still, first and foremost, communication has to be clear and concise. Otherwise, what's the point?
Did I miss any of your favorite startup slang? If so, don't hesitate to let me know.