10 Business Terms and Levels in the Startup World

As we are aware that today's business is experiencing rapid development, this is certainly inseparable from the technological advances behind it. The transition from the conventional era to the digital era is the main trigger for the emergence of various startups in various fields in Indonesia.

Through this review, Dailysocial tries to describe 10 terms and 10 levels of business that exist in the startup industry.

10 Startup Terms You Must Know

1. Incubator

Adapted fromTopMBA incubator refers to an activity carried out to help the development of startup companies, some examples of the programs are mentoring, training and even to the funding stage.

 2. Accelerator

The second term is accelerator, basically the accelerator has almost the same role as the incubator. What distinguishes them is the role between the two, the incubator plays a role in helping to give birth to startups while the accelerator plays a role in accelerating the development of startups.

 3. Venture Capital

The third term is venture capital (VC), venture capital refers to an investment company that will inject fresh funds into startups. Funding provided by venture capital divided into several types, some of which are: pre-seed,seed capital, large capital etc. The amount of funding provided adjusts to the level being undertaken by the startup company.

 4. Unicorn

Then enter the fifth term, I am sure that among all the existing terms this one is more familiar than the others. Unicorn is one type of level that exists in the startup business, a startup company is included in the unicorn type if it has a valuation value of more than USD $ 1 billion.

5. Seed Funding

Seed funding is one of the initial steps as well as one of the stages of funding carried out by startup companies, in the process of seed funding In this case, investors will provide investment in the form of capital to the company in the form of equity shares.

The goal is to develop products owned by the company, or it could be to increase the number of employees to support the performance of the startup itself.

6. Angel Investors

The next term is angel investors, angel investors become one of the main instruments that have a big influence on a startup company.

AdaptWeworkangel investors is an investment made by an individual or individuals in return for company shares, generally angel investors come from a close environment such as family and relatives.

7. Pivot

In terms of startup, pivot has the meaning of courage in making decisions made by a company because it has to start new things to support productivity and business success.

Pivot is carried out when a company has shown several indicators such as deteriorating company finances, products that do not match market demand, company internal problems and poor company performance.

8. Valuation

In the business world, valuation means the economic value of the business, while in startups, valuation is used as a benchmark for a startup company to measure the size of the business potential in the long term. Simply put, valuation is a selling point owned by a startup, valuation is divided into two types, namely pre-money valuation and post-money valuation.

 9. Cliff Period

The ninth term is cliff period, this term refers to a situation where the founders of a startup are undergoing a probationary period before officially owning shares in the startup company. Broken partnerships are commonplace in the business world, whether due to differences of opinion or other critical matters.

The purpose of cliff period itself is to anticipate things that are not desired by the company environment, such as the inappropriate contribution made by the new founder with what was previously agreed.

 10. Vesting Period

Then the last term is wearing period, this is an advanced stage of cliff period. At this stage the founders will begin to get ownership of the company's shares, the ownership that will be given by the company to the founders is given in stages within a mutually agreed period of time.

In some cases it was found that founders resigned when a company needed their role, of course this was very detrimental to the company. Therefore, a system was created wearing period This is with the aim that when the founders choose to resign the shares contained in the company have not been fully given to the founders.

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Disclosure: This article was written by Dhea Alif