Business Terms Glossary

Accelerator

An accelerator takes single-digit chunks of equity in externally developed ideas in return for small amounts of capital and mentorship. They’re generally truncated into a three to four month program at the end of which the start-ups graduate. Source: www.inc.com

Acquisition

Taking ownership of another business. Acquiring another company. Contributor: Raquel Félix, Researcher and Project Manager at With Company

Adventure Capitalist

An adventure capitalist is an entrepreneur who helps other entrepreneurs financially and often plays an active role in the company’s operations such as by occupying a seat on the board of directors, etc. Source: www.fundingsage.com

Angel Investor

Once, an unrelated individual investing monies in a business venture, often later than founders, friends and family (the “3F’s”), but before larger corporate investors such as venture capitalists (“VC’s”). The term “angel” arose in the entertainment industry, where investors would bankroll a production for a share of the profits. Now, with wealthier individuals able to invest significant funds throughout the development of a company (so-called “super-angels”), and venture capitalists sometimes investing alongside and on the same terms as angels, a more modern definition is that “angels” write checks with their own money, while “VC’s” write checks with other people’s money (venture capitalists typically raise funds from investors called “limited partners” who do not actively participate in the fund’s investment decisions and operations, whereas the VC’s act as the “general partners” making the investment decisions and overseeing the invested companies). Source: www.fundingsage.com

Angel Round

A round of investment into a startup company from angel investors not previously affiliated with the founder. Typically the first money invested in a company after the founders own money, and the founders friends and family. Source: www.fundingsage.com

Bootstrapping

Starting your business the good old fashioned way: with little (own) money and sweat capital, and reinvesting your earnings. Contributor: Bruno Nascimento - CEO and Co-Founder Parqly, Co-founder of Barba Brada

Bora [B oh - r aa]

It's a shorthand for Embora . Embora is an adverb there meaning "out of here". You would say “Vamos embora!" - "Let's get out of here!" but you can even omit "vamos" and say only Embora!, using it as an interjection. In its informal use, the word Embora can be used beside its meaning and just as a way of indicating encouragement. In this case vamos would also be omitted and you would yell Bora! for instance to support your football team: “Bora Portugal!" or Bora, bora" meaning "keep going, keep going". Contributor: Made of Lisboa

Bubble

Concept that is being on debate at the moment and is related with startups and other companies investment. Contributor: Sara de Praetere - Founder at Lisbon Workhub and StartUP Magazine

Burn Rate

The amount of cash that a company consumes each month in order to continue operations. Occasionally refers to total expenses, but more commonly used to refer to cash receipts minus cash expenses when the difference is negative. Example: My company has a burn rate of €100,000 and €1,000,000 in cash on our balance sheet, so we have 10 months of runway. Source: www.startupdefinition.com

Business Plan

A document utilized by management and relied upon heavily by some investors, that entrepreneurs use in detailing their business concept as well as their company’s overall strategic and financial objectives. In recent years the Business Model Canvas has become increasingly popular with both entrepreneurs and managers as a guide or framework for the startup’s efforts, and in many cases is now utilized in lieu of the Business Plan by these parties. Source: www.fundingsage.com

Canivete Suíço [Ca.ni.vét - Suí.ssú]

It’s an attribute. A person that is a "canivete suíço", is someone that can do a lot of different things and stuffs with incredible mastery. Like a MacGyver, this person is a problem solver, a T-Shapper, multitasked, lifelong learner. Contributor: Raquel Félix - Researcher & Project Manager at With Company

Cash Flow Statement

A report that details the inflows and outflows of cash for a business. This is different from an income statement because it includes items outside of revenue and expenses that impact cash, such as investments and financings. Example: Even though our income statement shows that we lost a million dollars last year, our cash flow statement reflects a huge net inflow of cash due to a new VC round. Sourcet: www.startupdefinition.com

Cohort Analysis

An analysis in which customers are separated into groups (cohorts) based on common attributes, most commonly the date of their registration or first purchase. Example: We ran a cohort analysis to determine if our newer customers were behaving differently than our older ones. Source: www.startupdefinition.com

Coliving

Coworking meets life itself. Groups of digital nomads gather in camps around the world, working and sharing accomodation in heavenly locations like Bali, beautiful islands in Greece or in the middle of the jungle in Costa Rica. Check projects like The Hacker Paradise; Roam.co; Copass Camps; DNX Camps; or even Coboat (yes, coliving in a boat). In common they all have an idea of sharing and openness made of different people, languages, cultures and professions. Contributor: Fernando Mendes - Coworklisboa

Coworking

A new verb to define a time and space shared by free and flexible workers although Coworking is much more than just shared office space. In fact, it is even much more than work space as it incorporates all aspects in life (professional, social, leisure, sport, well-being, etc) and it is nurtured by its resident communities. Coworking spaces are more hospitality oriented than work related. It is about being free, together. Lisboa has more coworking spaces than incubators, accelerators and fablabs all together. Contributor: Fernando Mendes - Coworklisboa

Dar aos gadabulhos [Dare - Aus - Ga.Da.Bu.Lhús]

Means the same as “dar ao dedo” (you can also use that expression). It means doing something very fast with you fingers, for example if you are writing an email or a text very fast in your keyboard you are “dar aos gadabulhos”. Just use it daily and you’ll sound like a professional Portuguese. Contributor: Matilde Horta - With Company

Deck

A slide-based presentation that can be transferred digitally. Typically associated with investment pitch presentations. Example: The VC told me to send him our deck and he'd call us if he's interested. Source: www.startupdefinition.com

Deep Bench

In sports, having a deep bench means having a large number of very talented players. As not all players are playing at the same time, very talented players will be sitting "on the bench" waiting to play. For startups, this means having a very smart, hardworking team and not relying on the founder to be the only star of the company. Example: "It is easier to get funded if you have a deep bench. No one wants to think that the fate of the entire company rests on one person alone. Source: www.startupdefinition.com

Demo Day

Where the graduating class of Incubators and Accelerators is given a chance to pitch to investors. Source: www.fundingsage.com

Desenrasque [Desén - rrás - quee]

s. masc. The Portuguese art of improvisation. To pull a MacGyver. Contributor: Miguel Ferreira - That Special Record

Down-Round

When the valuation of a company at the time of an investment round is lower than its valuation at the conclusion of a previous round. Source: www.fundingsage.com

Early

Often used to describe a company that is not yet large enough for the purpose at hand, such as an acquisition or fundraise. Example: I like the team but I'm not going to invest in the company because it's early. Source: www.startupdefinition.com

Early Exit

An approach to angel investing popularized by author Basil Peters, in which the goal of an investment is the sale of a company within a few years without requiring additional large investments from VCs, thereby providing high relative returns without requiring companies to be home runs. Source: www.fundingsage.com

Early Stage

Used to describe companies that have not yet reached meaningful scale. Example: We were considered an early stage business until we had about ten million dollars of revenue. Source: www.startupdefinition.com

EBITDA

Stands for Earnings Before Interest, Taxation, Depreciation and Amortization. This is a calculation of company profitability that excludes a number of factors. In some cases, this is a preferred way of looking at company profitability than net earnings because it removes non-cash expenses and expenses that are tied to a business's capital structure. Example: The company was able to raise debt corresponding to four times it's annual EBITDA. Source: www.startupdefinition.com

Entrepreneur

s. masc. Someone who puts ideas into actions. Someone resilient who makes it happen! Contributor: Mário Tarouca - Unono

FabLab

noum. A local fabrication laboratory which aims to democratise access to people and collaborative invention using digital technologies to make “almost anything”. Source: Fablab Lisboa

Financial Statements

Typically the term used to describe a company's balance sheet, income statement, and cash flow statement. Example: As part of due diligence, we had to give our new investor financial statements for the past three years. Source: www.startupdefinition.com

First Stage Capital

Is the money provided to entrepreneur who has a proven product, to start commercial production and marketing, not covering market expansion, de-risking, acquisition costs. Source: www.fundingsage.com

Flat Round

An investment round in which the pre-money valuation of a startups round is the same as its post-money valuation from the previous round. Source: www.fundingsage.com

Gross Margin

The amount of revenue left over after subtracting cost of goods sold. Can be represented as an absolute number or a percentage. Example: Our gross margin is about 40%, so for every €100 of sales we end up with €60 of net revenue. Source: www.startupdefinition.com

Growth Hacking

A role at a startup characterized by driving growth through tactical execution and technical projects. Example: The month after our growth hacker came in, our conversion rate went up 20%. Source: www.startupdefinition.com

Honeypot

An enticing offering used to lure in a specific audience. Example: Our free whitepaper is a honeypot that generates leads for our other products. Source: www.startupdefinition.com

Income Statement

A report showing a company's revenue, expenses, and net earnings or losses over a given time period. Example: If you look at our income statements over the past three years, you'll see that we've consistently doubled revenue. Source: www.startupdefinition.com

Incubator

An incubator, on the other hand, brings in an external management team to manage an idea that was developed internally. Those ideas can gestate for much longer periods of time and the incubator takes a much larger amount of equity [compared to accelerators]. Source: www.inc.com

Investor

s. masc. Someone who believes in ideas, that puts himself on the line and helps others make the idea come true. Contributor: André Valente

Joint Venture

A legal entity created by two or more businesses joining together to conduct a specific business enterprise with both parties sharing profits and losses. It differs from a strategic alliance in that there is a specific legal entity created. Source: www.thebalance.com

Jola [Jo. Lah]

s. fem. Jola is the cool urban way to order a beer. "Let's have a beer" you would say "Bora beber uma jola" [b oh - r aa - beh. ber - uh ma - jo lah!] Contributor: Made of Lisboa

Key Employees

Professional management attracted by the founder to run the company. Key employees are typically retained with warrants and ownership of the company. Source: www.fundingsage.com

Later Stage

A stage of company growth characterized by viable products, a developed market, significant customers, sustained revenue growth, and both profits and positive cash flow from operations. Later-stage companies would generally be candidates for an IPO. Investments in the C round or after qualify as later stage. Source: www.fundingsage.com

Learning Spaces

Learning is not an exclusive of schools and academia anymore. The ubiquity of the Internet brings learning to unusual spaces like work spaces, public spaces and digital ones of course. Education can now be built by every one of us (hack, in fact). We also learn by peers and that learning process is boosted by the tech-mediated life we all have nowadays. Contributor: Fernando Mendes - Coworklisboa

Liquidation Preference

A term in a venture capital deal that allows investors to get their money back before others receive proceeds from a sale of the company. Liquidity preference typically only comes into play when a company is sold for less than the post-money valuation that the investor paid. Example: Our investors only owned 10% of the company but they took home 50% of the sale price because of their liquidation preference. Source: www.startupdefinition.com

Maker

s.masc. A dreamer that makes it happen. A resilient, energetic and believer person who makes the dreams, plans and ideas come true. Contributor: Mariana Barbosa - Journalist at ECO

Minimum Viable Product - MVP

The product that you can put out the fastest with the least amount of work - while still maintaining high levels of quality - to test your hypotheses. Contributor: Bruno Nascimento - CEO and Co-Founder Parqly, Co-founder of Barba Brada

Net Revenue

A company's total sales, minus pass-through revenue. Net revenue is sometimes calculated by subtracting cost of goods sold, as well. Example: We sold €100 million worth of merchandise last year, but that merchandise cost us €40 million, so our net revenue was only €60 million. Source: www.startupdefinition.com

Networking

The process of creating business contacts and friendships. Meeting people that can work together with you. Contributor: André Valente

Open-End-Fund

An open-end fund, or a mutual fund, generally sells as many shares as investor demand requires. As money flows in, the fund grows. If money flows out of the fund, the number of the fund’s outstanding shares drops. Open-end funds are sometimes closed to new investors, but existing investors can still continue to invest money in the fund. In order to sell shares, an investor generally sells the shares back to the fund. If an investor wishes to buy additional shares in a mutual fund, the investor generally buys newly issued shares directly from the fund. Source: www.fundingsage.com

Pá [PAH]

Is a meaningless word that is used in every sentence you should be careful not to confuse your learning process. It works as an interjection, and it gives you the meaning of "Hey man!" like when you want to catch someones attention. This is a quite useful Portuguese word because it not only emphasizes what the speaker is saying but also gives you some time to think about what you want to say. In English you'd say "hmm..." or "you know...", the equivalent in Portuguese would be just a "Pá..." or "Eh Pá.." [heh pah!] You can also use it when you are surprised with something good or bad like "Hey dude! Careful!" - "Eh pá! Cuidado!" [heh-pah! kooy -dah-doo!] Contributor: Made of Lisboa

Pitch

A presentation in which a startup founder attempts to persuade an investor of the viability of their company. The presentation spectrum varies based on the specific purpose of the pitch. Brief presentations in which an entrepreneur provides a 30 - 60 second overview of their idea, business model and marketing strategy, with the purpose of attaining a followup audience with an investor are described as elevator pitches. Formal, detailed presentations utilizing power point type slide decks, with the specific objective of seeking investment from angel groups or VCs, are known as investment presentation pitches. Source: www.fundingsage.com

Post-Money Valuation

In a venture capital transaction, the post-money valuation is what a company is worth after an investment has been made. It is the sum of the pre-money valuation and the amount of new cash that has been invested in the business. Example: Sequoia invested €5 Million at a €20 Million pre-money valuation, so our post-money valuation was €25 Million. Source: www.startupdefinition.com

Pre-Money Valuation

The valuation placed on a company in a venture capital transaction, not including the amount of cash to be invested. Example: The VC firm offered us a pre-money valuation of €20 Million. Source: www.startupdefinition.com

Private Equity

A field of investing that focuses on investing in the equity of companies through negotiated transactions rather than buying stock on a public exchange. Venture capital is a type of private equity, as are leveraged buyouts and mezzanine financings. Usually, however, a private equity firm refers to one that focuses on late-stage companies and transaction values much higher than a typical VC deal. Example: As soon as our company crossed €10 million in EBITDA, we started getting calls from private equity firms who wanted to buy us out. Source: www.startupdefinition.com

Revenue

Income a company receives from its business activities, usually as a result of the sale of goods or services. Also called turnover or sales. Example: Few problems are more serious for a business than an inability to generate revenue. Source: www.startupdefinition.com

Right of First Refusal

The right of its holder to buy or invest in a company before the owner of the company is entitled to enter into the same transaction with a third party. Example: We want to sell our business to Apple, but we have to talk to Google first because they have a right of first refusal. Source: www.startupdefinition.com

ROI - Return On Investment

A measure of performance that is used to evaluate or compare the efficiency of a use of capital. It is typically calculated as net profit / investment. Example: The return on investment of data-driven marketing can often be over 10X. Source: www.startupdefinition.com

Run Rate

The result of extrapolating the current period's financial results over a longer period of time. Most often used in the context of extrapolating the current month into an annual number by multiplying by twelve. Example: The startup reported that it grew rapidly to finish the year at a €10 million run rate. Source: www.startupdefinition.com

Runway

The amount of time until your startup goes out of business, assuming your current income and expenses stay constant. Typically calculated by dividing the current cash position by the current monthly burn rate. Example: After raising another €50 million, our company now has enough runway to last us through the heat death of the universe. Source: www.startupdefinition.com

Scale

To grow; typically associated with fast growth and improving capital efficiency. A company that is "at scale" has captured most or all of these efficiencies. Example: Google was able to scale quickly because their infrastructure is highly automated. Source: www.startupdefinition.com

Seed Round

A small round of funding that is raised by a very early stage company prior to a Series A investment. Often done in the form of a convertible note. Example: We raised a €500k seed round to build out our MVP. Source: www.startupdefinition.com

Serial Entrepreneur

A person who has started many companies, usually one after another. Example: Elon Musk's multiple successful IPO's cemented his reputation as a serial entrepreneur Source: www.startupdefinition.com

Series A

Typically refers to the first major round of VC funding taken on by a company; name is derived from the class of stock issued to the investors in that round Example: A year after our seed round, we raised a €5 Million Series A with a top-tier investor. Source: www.startupdefinition.com

Soft Landing

An outcome for a troubled startup that prevents them from going out of business. Often allows investors to get some portion of their money back, team members to get new jobs, and the founders to save face in the press. Example: After their product failed to take off, they started looking for a soft landing for their business. Source: www.startupdefinition.com

Startup

A company, usually of small size, that started little time ago. Contributor: André Valente

Strategic Acquired

An operating company, as opposed to a financial investor like a private equity firm, that acquires another company. Often pays a higher price than would be indicated by the financials of the acquired company because the acquirer gets strategic benefit from the deal. Example: Google often pays a premium when acquiring ad-tech startups because they are a strategic acquirer. Source: www.startupdefinition.com

Tender Offer

An offer to purchase stock made directly to the shareholders. One of the more common ways hostile takeovers are implemented. Source: www.fundingsage.com

Trailing Revenue

The revenue a company earned in an immediately previous period, usually the past twelve months. Example: Our trailing revenue is much lower than our run rate because we have been growing quickly. Source: www.startupdefinition.com

Unicorn

A unicorn is a start-up company valued at over $1 billion. The billion-dollar technology startup was once the stuff of myth. Contributor: Alda Telles - Master Mind at Attitude Smart Communications

Up-Round

When the valuation of a company at the time of an investment round is higher than its valuation at the conclusion of the previous round. Source: www.fundingsage.com

Venture

Venture is often used for referring to a risky start-up or enterprise company. Source: www.fundingsage.com

Venture Capital

Investment capital that is put into a startup company in exchange for an ownership stake in the company. Example: We raised €3 million in venture capital to get our company off the ground. Source: www.startupdefinition.com

Wantrepreneurs

It’s a wannabe entrepreneur. Contributor: Raquel Félix - Researcher & Project Manager at With Company

Wireframe

Low resolution descriptions of a user interface or website. Used to formulate high level functionality and layout before the full design effort is completed. Example: We have put a lot of effort into wireframes, so we hope that our design team will know exactly what we need them to do. Source: www.startupdefinition.com

Zombie Fund

A VC firm that can't raise a new fund, and thus can't make new investments. Source: www.fundingsage.com

Zombie Startup

A company that shows little to no growth in web traffic in the past year that claims to still be operating. Example: They claim to be a big deal, but they've had almost zero growth in the last two years. What a zombie startup. Source: www.startupdefinition.com