Startup Fundamentals
This kind of pitch is a brief, memorable summary of a business idea, short enough to deliver during a short ride between floors.
What is an elevator pitch?
Interviewing only your roommates, best friends, and family members can make your research suffer from this.
What is a bias?
Jeff Bezos started this online bookstore out of a garage in Seattle in 1995 before it became a massive global retailer.
Amazon
This person gives money to startup hoping to make money if the business succeeds
Who is an investor?
In 2007, roommates Brian Chesky and Joe Gebbia couldn’t make rent, so they inflated air mattresses and rented them to conference attendees under the name “Air Bed and Breakfast,” the origin of this global company.
What is AirB&B?
Unlike a venture capitalist, who invests other people's pooled fund money, this type of investor uses their own personal wealth to fund early-stage startups, often in exchange for equity.
What is an angel investor?
When twenty interviews reveal that students repeatedly struggle with the same problem.
What is a pattern?
Long before streaming movies online, this company launched in 1997 as a flat-fee, mail-order DVD rental service.
Netflix
This is money used to start or grow a business
What is capital?
Venture capital funds charge a fee to some of their partners that is usually 1%-3%. What is that fee called?
Management Fee
This funding strategy means growing a company using only personal savings and business revenue instead of taking money from outside investors.
What is bootstrapping?
A specific group of people or businesses sharing similar needs, characteristics, or behaviors you are aiming to serve.
What is a customer segment?
This lodging giant started when three roommates rented out three air mattresses on their living room floor during a crowded local conference.
AirBnB
This happens when a company's product meets what customers want and need
What is product-market fit
Track athlete Phil Knight and his University of Oregon coach, Bill Bowerman, co-founded this company in 1964 under its original name, Blue Ribbon Sports.
What is Nike?
Venture capitalist Aileen Lee of Cowboy Ventures coined this mythical-creature nickname in a November 2013 essay to describe U.S. software startups valued over $1 billion.
What is a "unicorn"?
An urgent and expensive issue that a customer actively wants to solve and is willing to spend money or time to fix it.
What is a valuable customer problem?
Launched in Sweden in 2006 by Daniel Ek and Martin Lorentzon, this digital platform revolutionized legal music streaming.
Spotify
This happens when a startup tries to grow too quickly before its product is ready
What is premature growth?
What is a performance metric showing the annualized rate of return generated by an investment, taking into account the timing of cash flows?
Internal Rate of Return (IRR)
This legally non-binding document outlines the proposed terms of an investment deal, including valuation and equity stake, before a formal contract is drawn up.
What is a term sheet?
The continuous cycle of building a test, measuring reactions, learning from the data, and refining your idea.
What is a customer feedback loop?
Before it became a photo-sharing app, founders Kevin Systrom and Mike Krieger launched it as a check-in app called Burbn
This explains why customers should want to buy a company's product or service
What is value proposition?
An investment strategy focused on minimizing losses and maintaining the original capital invested, often favored in lower-risk portfolios.
capital preservation