33 Words Every Entrepreneur Should Know

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You can walk the walk but can you talk the talk? As an entrepreneur, not knowing the startup lingo could cause important conversations to get lost in translation. Don’t get caught at an important meeting, or worse, at your pitch and not know what seed money is – you will be eaten alive! This mistake could cause you to lose your credibility or loose out on an important opportunity. To avoid this tongue-twisting scenario, start here with these 33 words to strengthen your vocabulary.

 

1. Acquisition

To take ownership of another business.

 

2. Angel Investors

Individuals who back emerging entrepreneurial ventures.

 

3. Balance Sheet

A snapshot of a company’s financial condition that includes information on the company’s assets, liabilities, and equity.

 

4. Bootstrap

To build a company without the use of outside capital.

 

5. Business Incubator

Provides workspace, coaching, and support services to entrepreneurs and early-stage businesses.

 

6. Board of directors

A group of influential individuals, elected by stockholders, chosen to oversee the affairs of a company.

 

7. Bylaws

A set of rules that provide a framework for how a company will operate. These typically include rules about voting rights, governance, and meeting schedules.

 

8. Cap Table (capitalization table)

A ledger which details the owners of a company and the number of shares owned by each owner.

 

9. Copyright

A legal device that provides the creator of a work of art or literature, or a work that conveys information or ideas, the right to control how the work is used.

 

10. C Corporation 

A business entity whose corporation is taxed separately from its owners. To form a corporation you need to file certain documents with your state’s Secretary of State office.

The general taxes and liabilities for a C Corporation are as follows:
  1. Taxes – corporation is taxed separately from its owners
  2. Liability – limited liability

 

Incorporate Your Business

 

11. Convertible Note

Short-term debt that can convert into equity.

 

12. Go-To-Market Strategy

A company’s plan for acquiring market share.

Usually involves 5 Key Questions:

  • WHO is our active target within the market?
  • WHAT is our product portfolio for target customers?
  • HOW MUCH will we charge for our products for different customers?
  • HOW will we promote our products to target customers?
  • WHERE will we promote and sell our products to target customers?

 

13. General Partnership

A business operated by two or more owners that does not require any paperwork to be filed with a government body. General partners split profits and losses equally depending on the number of partners, unless the partners explicitly agree to split profits and losses in a different manner (which should be put in written contract agreement). In general, partners are personally liable for the acts and/or omissions of other partners.

The general taxes and liabilities for a General Partnership are as follows:
  1. Taxes –   partners pay taxes on their share of the profits (or deduct their share of the losses) on their individual income tax returns
  2. Liability – partners personally liable

 

14. Intrapreneur

An individual who takes on entrepreneur-like ventures within a large corporate environment.

 

15. Limited Liability Company/Corporation (LLC)

A business entity that protects owners from personal liability and offers the ability to choose whether to be taxed personally or like a corporation. To form a LLC you need to file certain documents with your state’s Secretary of State office.

The general taxes and liabilities for LLCs are as follows:
  1. Taxes – taxed personally or like a corporation (if you elect to be taxed as a corporation)
  2. Liability – limited liability

 

Incorporate Your Business

 

16. Limited Partnership

Limited partnerships are formed by two or more people, with at least one person acting as the general partner who has management authority and personal liability, and at least one person in the role of limited partner who is a passive investor with no management authority. To form a Limited Partnership you need to file certain documents with your state’s Secretary of State office.

The general taxes and liabilities for a Limited Partnership are as follows:
  1. Taxes –  partners pay taxes on their share of the profits (or deduct their share of the losses) on their individual income tax returns.
    • Limited partners, as a rule, do not have to pay self-employment taxes; because they are not active in the business.
  2. Liability – only general partners are liable

 

17. Merger

A legal consolidation of two companies into one entity.

 

18. Minimum Viable Product

Is a strategy used for fast and quantitative market testing of a product or product feature.

 

19. Non-Disclosure Agreement (NDA)

A legal agreement in which one party agrees to not reveal proprietary information it learns about another party. Different forms of NDAs are used in employment agreements, business partnerships, financial transactions, and numerous other situations.

 

20. Patents

A set of exclusive rights granted by a sovereign state to an inventor or assignee for a limited period of time in exchange for detailed public disclosure of an invention. An invention is a solution to a specific technological problem and is a product or a process.

 

File A Patent

 

21. Return On Investment (ROI)

Is the concept of an investement of some resource yielding a benefit to the investor. A high ROI means the investment gains compare favorably to investment cost. As a performance measure, ROI is used to evaluate the efficiency of an investment or to compare the efficiency of a number of different investments.

 

22. Seed Money

A very early investment (typically coming from friends, family or crowdfunding) meant to support the business until it can generate cash of its own, or until it is ready for further investments.

 

23. Series A

The name typically given to a company’s first significant round of venture funding. The name also refers to the class of preferred stock sold to investors in exchange for their investment.

 

24. Serial Entrepreneur

A person who has started many companies, usually one after another.

 

25. Sole Proprietorship

A business that is owned and run by one individual that does not require any paperwork to be filed with any government body.

The general taxes and liabilities for sole proprietorship are as follows:
  1. Taxes –  profit and losses reported on personal tax return
  2. Liability – personal liability

 

26. S Corporation

A type of business entity that doesn’t pay income taxes at the corporate level. Instead, shareholders must report the income or loss on their own individual income tax returns. With an S-corporation you are limited to only 100 shareholders. To form a S Corporation you need to file certain documents with your state’s Secretary of State office.

The general taxes and liabilities for S-Corporations are as follows:
  1. Taxes –  shareholders pay taxes on their share of the profits (or deduct their share of the losses) on their individual income tax returns
  2. Liability – limited liability

 

Incorporate Your Business

 

27. Trademark

Is generally a word, phrase, symbol, or design, or a combination thereof, that identifies and distinguishes the source of the goods of one party from those of others.

 

File Your Trademark

 

28. Trade secrets

In most states, a trade secret may consist of any formula, pattern, physical device, idea, process or compilation of information that both:

  • provides the owner of the information with a competitive advantage in the marketplace, and
  • is treated in a way that can reasonably be expected to prevent the public or competitors from learning about it, absent improper acquisition or theft.

 

29. Trade Dress

Is a broad term used to describe the distinctive visual elements of a product or service. This includes but is not limited to packaging, building design, décor, floor layout, employee uniform, or anything else that specifically connects to the source of a product.

 

30. Valuation

The process by which a company’s worth or value is determined. An analyst will look at capital structure, management team, and revenue or potential revenue, among other things.

 

31. Value Proposition

The promised benefit or problem elimination that a customer will experience as a result of using a product or service.

 

32. Vesting Schedule

The timeline over which someone earning stock options or restricted stock gains ownership of that security.

 

33. Venture Capital

Investment capital that is put into a startup company in exchange for an ownership stake in the company.

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