A Start Up Glossary

Due to a spontaneous opportunity, 10.5 months ago I half-crept, half-cannonballed off the proverbial bridge of academic research into the river of "industry".  I've learned a lot in both realms.  But perhaps most importantly, I've learned that if you want a chance to keep you head above the class four rapids that are inherent to start up world, you've got to swim the swim, walk the walk and mostly importantly, talk the talk. You should not, for example, have to ask what "VC" stands for, ten minutes before your scheduled meeting with said "VC" (purely hypothetical). Here's a post with some terms that are now near and dear to my vocabulary.  Definitions have been colloquially penned by yours truly, and may or may not match Merriam Websters'.  This post is dedicated to me 10.5 months ago, my parents, who are as clueless as I was 10.5 months ago, and my co-founder/colleague/CEO, whom I had to ask what these words meant in the first place.

A banana in a biotech parking lot

Start-up: A company that hasn't made it yet.  Generally when someone thinks of a start up they think of a new company with few employees.  Bonus points if it got its start in a garage.  But really a start up can be any size and any age, as long as it hasn't been successful.  Success is defined in a few ways, all of them being making money. So, in my opinion, a start up is an often small, often new company that is trying to do something unprecedented in this world but has not yet been acquired, gone public or had a substantial, longstanding revenue stream.   

Founder and Co-founder: The people who started the company! These are the people in the garage, or the naive researchers who agree to move to a new city in the name of a new idea.  Generally, a start up has between 1-4 founders, most of which make up the company's leadership (ie they're also the CEO/president/CSO/COO/other acronym).  A founder gets founding equity in a company which is seen as a perk.

Types of Investors
Even if a company isn't yet making money, they still need money.  That's where investors come in.  There's a few types of investors, and I'll highlight three of them.

• Friends and Family: Money from your rich uncle, your wealthy best friend's dad, your colleague friend who believe in you all count as "Friends and Family" investments.  A really early start-up often has F&F money (no one calls it F&F but saving on typing folks).  Amounts could range from a couple thousand bucks to 200K, depending on how endowed your network is and how good of an idea you have, or how good of an idea your affluent auntie thinks you have anyway.

• Angel:  A step up from your Friends & Family.  These are people who have come into personal fortune and are pretty serious about investing in quality ideas, not just because they've known you since you were 5.  Usually Angel investors have excelled in their field within a major company or a start up, and now they have the means and time to get into investing in companies usually concentrated within a certain field.  Angels are like being small-scale philanthropists who still want to make some dough.  They often still have a day job, and they are useful because they may know people within your field that could be valuable connections. 

• VC: To the person that was me in the story that was described above, VC is Venture Capitalist.  That might be the first and last time you ever see it fully spelled out because no one says anything but VC.  These are the big (though still not biggest) kahuna's of the start-up investment food chain.  These are guys that majored in money, likely got a job through secret familial networking and are in charge of investing rich people's cash in a systematic and hopefully fruitful way.  They work for firms with names that are reminiscent of cavemen-era natural phenomenons and they usually sit stone-faced during your pitch for fear that one small smile is a binding obligation to give you millions.  They might be younger than you and wearing board shorts but they'll ask every probing question you were hoping to sweep under the rug and you will fake smile and answer them because you realize they hold the future of your start up between the pages of their checkbook. 

Biotech: Pretty much it's assumed that this is 2016 so every start up minus the girls selling peanut butter from their blenders are generating a product that is dependent on some sort of advanced computationally-related technology; thus the term "tech" is inherent.  The prefix is associated with the market you're trying to serve.  You're letting users search for the best credit card rates? That's Fintech.  You're making a interface that allows patients to have faster access to their medical records? Medtech for sure.  You're generating a database that helps farmers understand how much to water their crops? Bingo, Agtech.  Biotech is loosely defined as using live organisms to make products that improve people's lives.  We are not exactly doing that but that is the overall umbrella we fall into until another "tech" buzzword proliferates. 

KOL: I still routinely forget what this stands for.  So many acronyms, people.  But, since I'm currently remembering I will tell you that it stands for Key Opinion Leader.  These are the VIPs of the field you're working in.  You become a KoL by being a badass and making other people realize you're a badass.  Pertaining to start ups, KoLs are people you want on your advisory team, on your board of directors, and generally on your side of the boxing ring. 

Due Dilligence: If I saw a banana peel at the frequency that I heard the term "due dilligence" this blog would be off the hook!  What I'm saying is that due dilligence is used so often, with such liberality that I find myself using it a ton, without really knowing its meaning in the first place.  From what I can tell contextually, due dilligence is synonymous with research.  It's used most often to refer to what investors need to do behind the scenes before they feel comfortable investing in a start up.  I don't know why we feel the need to use a fancy phrase to refer to stalking the cofounders linkedIn's and publication record, calling their friends of friends to see if the company is legit, and making fun of their slides with their colleagues, but it's what is used so I roll with it. 
 
Exit: One year ago if I was asked what an "exit strategy" was, I would've assumed it meant lining up to use the inflatable slides if the airplane experiences an emergency landing.  In start-up world, the question means something different, but the answer could actually be the same.  An exit strategy is what happens at the end. When the day is done, you've hired your people, you've spent your money, you've made a product or service....then what? Are you trying to make your own money and be publicly traded? Or be acquired by a bigger company?  How you gonna ca$h in big?  Or worse, if all fails, how are you going to make sure you're at the front of the line when the blow-up slides are inflating.  

Accelerator:  This is what we came down to the Bay Area for in the first place.  A start-up accelerator is a program usually sponsored by a larger, more established company that provides any or all of the following for a certain period of time: lab space, office space, machine-usage, cash money, advising and mentorship.  We were lucky enough to be part of one that supplied all of those things.  An accelerator takes a portion of equity for themselves in exchange for the aforementioned perks.  In my experience they give you so much reassuring and instructive hand-holding that it's totally worth it.  An Accelerator is not an Incubator.  An incubator is generally just a co-working space and maybe some free white board pens for companies that can't afford their own digs, which is actually everyone.

A banana outside our "Accelerator"