The Startup EDR Glossary is designed to help young founders and startups become familiar with the correct explanations and definitions. For this purpose, the different terms and the corresponding explanations and definitions are listed below. The Startup EDR Glossary should help to eliminate knowledge gaps and to keep the different technical terms apart or make them understandable.
Explanation/ Definition of the Term
An accelerator is an institution that coaches start-ups for a limited period of time, often in return for shares in the company, in order to accelerate the development process in relation to a specific outcome.
Bootstrapping refers to the financing of the foundation only from the founders' own financial resources and from the self-generated turnover, without the help of an external source of financing. Finanzierungsquelle.
Business Angel describes a successful, experienced founder or entrepreneur, who supports young founders and start-ups with capital, networks or know-how in their start-up project, usually by selling company shares.
The business plan is the concept or plan for the implementation of the business project. It serves to assess the chances of success of the business idea and is also relevant for potential investors.
Business Model Canvas
The Business Model Canvas describes a certain method of business model development according to the inventor A. Osterwalder, in which all important aspects of the business model are located on a clear matrix.
Refers to a summary table, also known as a capitalisation table, which clearly lists all share distributions and fundings in order to show who holds how many shares in the company.
Cash flow is defined as the difference between income and expenditure within a given full stop and refers to the money that is actually available.
A cost-benefit analysis is carried out to examine the economic viability of projects. This involves comparing properties and contrasting their financial benefits with their costs.
Coworking describes one or more rooms in which people with different projects and professions, physically together, but each on their own, work at flexible workstations. These are usually large, open spaces in which there are no fixed places, but where people share workstations and infrastructure.
Crowdfunding is a capital procurement opportunity in which the business idea, or usually an innovative product, is offered on a crowdfunding platform in order to finance the necessary amount of capital for e.g. serial production through a large number of investors.
Customer Aquisition Costs (CAC)
Customer Acquisition Costs are the costs incurred in customer acquisition. They are an important key figure as they indicate the value over certain customers.
Design Thinking is an approach that is intended to lead to innovative ideas and proposals for solutions while adhering to a certain procedure, and is highly user-oriented.
The Elevator Pitch is a precise short presentation of the business idea and should convince potential investors, business angels etc. of the business idea in max. one minute.
General Terms and Conditions (GTC's)
The GTC's serve to simplify the conclusion of contracts and the processing of business transactions. The contents of the GTC's are predetermined by law within the various contract forms.
A hackathon is usually described as a private or public software and hardware development event in which participants design and present the most creative and innovative solutions in the shortest possible time and are then awarded prizes by a jury.
An incubator is an institution that supports start-ups and founders with technical infrastructure, coaching and network contacts in the implementation of a start-up project. Often there are also offers for training and seminars on economic or legal topics.
Industry 4.0 refers to the digitisation of industry.
Initial Public Offering (IPO)
An Initial Public Offering (IPO) is the first time a company goes public by trading in shares and offering shares to the public.
A pitch is the presentation of a business idea to investors, a jury or at events. The aim of the pitch is to convince e.g. investors of the idea within a short time.
Lean Startup Method
The Lean Startup method is a method of bringing products or services to market quickly in a simple but usable form (MVP). With the help of customer feedback, conclusions for further development can be drawn early on.
Minimum Viable Product (MVP)
The Minimum Viable Product is a first, minimum viable version of a product or service.
In order to use the innovation potential from external sources, the open innovation method can be used. This involves opening up internal innovation processes beyond the boundaries of the company to the outside world in order to receive external feedback.
Seed financing or early-stage financing is a financial aid which can be given to a promising start-up in the initial phase to cover initial costs. This financial assistance often replaces bank loans, which are rarely granted to young companies by the bank.
Self-financing, is the financing through own financial resources (e.g. equity capital or money from family and friends). The advantage of this type of financing is that you have full control over your own company and are not dependent on external capital providers.
The term "startup" is derived from "to start up" and means to found or start something. Start-ups are usually defined as young companies that pursue an innovative and usually scalable business idea.
A start-up ecosystem provides a supporting environment for start-ups. It consists of potential founders, political actors, companies and possible capital providers. Each start-up ecosystem is individual and site-specific.
Venture Capital, means the off-market equity investment by external capital providers in a young, innovative company. Venture Captials support start-ups in the early phase and want to sell the purchased shares profitably later. This form of financing offers start-ups capital and business management know-how, but also requires the investment companies to be granted a say in the company's affairs.