Glossary

A business based on transactions that takes place between one business and another. A business is the end user.

A business based on transactions that takes place between a business and an individual. The individual is the end user.

A business that extends the B2B model to include e-commerce for consumers.

A financial statement that reports a company's assets, liabilities, and shareholder equity and is used to evaluate the business at the date of publication.

BDD is a practice where members of the team discuss the expected behavior of a system in order to build a shared understanding of expected functionality.

Testing of a product's beta version by real users in a real environment to find defects and gather feedback on its functionality and usability.

The process of starting a company via one's own personal savings. Essentially, bootstrapping means self-funding.

The distinctive identity that differentiates a product or business from its competitors. A brand encompasses the name, logo, visual identity, and communications strategy of a company or product.

Short-term financing used by a company to solidify its short-term position until a long-term financing option can be arranged.

Refers to a period when the valuations of startups are abnormally high when compared to historic valuations.

Burndown charts and burnup charts track the amount of output (in terms of hours, story points, or backlog items) a team has completed across an iteration or a project.

The rate at which a new company spends its venture capital to finance overhead before generating positive cash flow from operations; it's a measure of negative cash flow.

Business agility is the ability of an organization to sense changes internally or externally and respond accordingly in order to deliver value to its customers.

A company's plan for making a profit. It identifies the products or services the business will sell, its target market, and any anticipated expenses.

A detailed document that outlines a company's objectives, strategies for achieving them, financial projections, market research, and operational plans.

A contest between startups, early-stage businesses, and/or growing businesses, the goal of which is for participants to develop and submit an original idea or complete their existing business plan.

The use of technology to execute recurring tasks or processes in a business where manual effort can be replaced. It is used to improve efficiency, reduce costs, and streamline processes.

The purchase of a company's shares in which the acquiring party gains control of the targeted firm. A buyout can be conducted by an external company or internally by management.

The amount of cash that a company has on hand at any given time. It is a key indicator of financial health and liquidity.

Refers to either a company's total market value of equity, or a cap on the conversion rate for investors in a convertible note, protecting their investment.

The transition from a little-known product to the mainstream. If a startup can successfully cross the chasm, it has the opportunity for mainstream success and hypergrowth.

The percentage of customers or subscribers who cancel or do not renew their subscriptions within a given time period. It's a critical metric for businesses with a subscription-based model.

Collective code ownership is the explicit convention that every team member can make changes to any code file as necessary: either to complete a development task, to repair a defect, or to improve the code's overall structure.

The process of bringing new products and services to the market.

Equity ownership in a corporation, with voting rights and the potential for dividends. Common stockholders are last to receive any payouts in the event of liquidation.

A condition or circumstance that puts a company in a favorable or superior business position. It can arise from various sources, such as cost structure, branding, the quality of product offerings, distribution network, and customer support.

The combination of pay and other rewards received by employees for their performance at work. Benefits can include health insurance, pension plans, paid vacation, stock options, and more.

Instruction provided to employees on the laws and regulations applicable to their job function or industry. These laws are predominantly in place to ensure workplace safety and to prevent discrimination.

A strategic marketing approach focused on creating and distributing valuable, relevant, and consistent content to attract and retain a clearly-defined audience — and, ultimately, to drive profitable customer action.

Continuous deployment aims to reduce the time elapsed between writing a line of code and making that code available to users in production. To achieve continuous deployment, the team relies on infrastructure that automates and instruments the various steps leading up to deployment, so that after each integration successfully meeting these release criteria, the live application is updated with new code.

Continuous Integration is the practice of merging code changes into a shared repository several times a day in order to release a product version at any moment. This requires an integration procedure which is reproducible and automated.

A form of short-term debt that converts into equity, typically in conjunction with a future financing round; it is a common tool for early-stage startups to raise capital.

A method for seed stage investors and angels to invest in an early stage company that hasn't been explicitly valued. After more information becomes known, the note can be converted into equity.

Startups that work best if they remain small. They are often able to operate out of a person's home.

A form of crowdsourcing where individuals get equity in return for their funding. Because this is a heavily regulated environment, crowdinvesting is usually done via specialized crowdinvesting platforms.

The practice of referring to a body of people to obtain needed knowledge, goods, or services.

The daily meeting is one of the most commonly practiced Agile techniques and presents opportunity for a team to get together on a regular basis to coordinate their activities.

Raising capital by borrowing money that must be repaid over time, with interest. This can be in the form of a loan from a bank or issuing bonds. It's an alternative to raising equity where ownership of the company is diluted.

Presentation used by founders to showcase the potential of their startup. This is what is provided to investors in the hope of raising capital.

The definition of done is an agreed upon list of the activities deemed necessary to get a product increment, usually represented by a user story, to a done state by the end of a sprint.

The process in which an underrated product or service becomes popular enough to replace or displace the conventional product or service.

An innovation that significantly alters the way that consumers, industries, or businesses operate, often displacing established market-leading firms and products.

Strategies, policies, and practices that promote the representation and participation of different groups of individuals, including people of different ages, races, ethnicities, abilities, genders, sexual orientations, etc.

Funding rounds where a company raises capital at a lower valuation than the previous round, often reflecting decreased expectations for the company's future prospects.

A legal concept in corporate law that allows majority shareholders to force minority shareholders to join in the sale of a company under the same terms.

A business model where the brand or manufacturer sells its own products to its end customers.

An investigation or audit of a potential investment or product to confirm all facts, such as reviewing all financial records, plus anything else deemed material. It refers to the research done before entering into an agreement or a financial transaction with another party.

The process of integrating a new employee with a company and its culture, as well as getting a new hire the tools and information needed to become a productive member of the team.

Efforts by employers to keep employees in their workforce. In addition to salary and benefits, retention strategies can include career development opportunities, work-life balance initiatives, employee recognition, and a positive workplace culture.

An epic is a large user story that cannot be delivered as defined within a single iteration or is large enough that it can be split into smaller user stories.  This is part of the Agile framework.

In software development, an "estimate" is the evaluation of the effort necessary to carry out a given development task; this is most often expressed in terms of duration.

A person who believes so much in a product or service that they freely try to convince others to use it.

A funding round where a company raises capital at the same valuation as the previous funding round, indicating no significant company valuation increase or decrease.

An estimate of future financial outcomes for a company or project, often including projected income statements, balance sheets, and cash flow statements.

A business model where customers are offered a restricted version of a product or service at no cost. Additional features are available at a cost.

An Agile team frequently releases its product into the hands of end users, listening to feedback, whether critical or appreciative.

When a startup raises their first outside capital from its own network. This is less formal than later funding rounds.

The ability of the startup to have a competitive advantage by being the first to market in a new product category.

The primary method of financing that startups undertake to raise external capital.

The use of game design principles to make a product or service more fun, engaging, and rewarding to users.

A phase of a company's lifecycle when it has successfully navigated the startup phase and is generating consistent revenue, focusing on expansion and scaling.

A marketing technique developed by technology startups which uses creativity, analytical thinking, and social metrics to sell products and gain exposure.

The use of aggressive but often cost-effective digital marketing tactics to grow and retain a user base, gain exposure, and sell products.

The team meets regularly to reflect on the most significant events that occurred since the previous such meeting, and identify opportunities for improvement.

The growth curve of a startup that investors want to see, where metrics such as active users or sales double each year; also known as "J-curve" or "Up-and-to-the-right".

"Integration" (or "integrating") refers to any efforts still required for a project team to deliver a product suitable for release as a functional whole.

In an Agile context, Incremental Development is when each successive version of a product is usable, and each builds upon the previous version by adding user-visible functionality.

An Intellectual Property Assignment Agreement (IP Assignment Agreement) is a legal document that facilitates the transfer of ownership of intellectual property (IP) rights from one party to another. This type of agreement is crucial in various business transactions, including the sale of a business, mergers and acquisitions, and employment contracts where employees agree to assign any inventions or work created during their employment to their employer.

An Intellectual Property Assignment Agreement is essential for ensuring the clear and undisputed transfer of IP rights, protecting the interests of both the assignor and the assignee. It provides legal certainty and clarity about the ownership and rights to use, sell, license, or otherwise exploit the intellectual property involved. This agreement is particularly important in industries where IP is a critical asset, such as technology, entertainment, manufacturing, and research and development.

An employee within a company that is tasked with developing an innovative product or project within the company.

The supervision of non-capitalized assets (inventory) and stock items. A component of supply chain management, inventory management supervises the flow of goods from manufacturers to warehouses and from these facilities to point of sale.

An iteration is a timebox during which development takes place. The duration may vary from project to project and is usually fixed.

Agile projects are iterative insofar as they intentionally allow for "repeating" software development activities, and for potentially "revisiting" the same work products (the phrase "planned rework" is sometimes used; refactoring is a good example).

The process of introducing a product or service to the market. A “soft” launch may precede a public launch and is done as a way to work out bugs and judge how a product or service will be received by users before a formal launch.

An investor who organizes a funding round and typically contributes a significant portion of the capital. They may also negotiate terms on behalf of other investors.

A marketing tool that generates leads by offering a long-form resource (e.g., an ebook, report, or webinar) in exchange for a user's contact information. It's designed to maximize the number of targeted leads by offering value.

Lead Time is the time between a customer order and delivery. In software development, it can also be the time between a requirement made and its fulfillment.

A systematic method for waste minimization within a manufacturing system without sacrificing productivity. Lean also applies to service-oriented processes.

A partnership made up of one or more general partners (who have full management responsibilities and unlimited liability) and one or more limited partners (who provide capital but have limited liability and are not involved in day-to-day management).

The process of bringing a business to an end and distributing its assets to claimants. It occurs when a company is insolvent and cannot pay its obligations.

Terms in a venture capital agreement that specify which investors are paid first and how much they are paid in the event of a liquidation event, such as the sale of the company.

The measure of the amount of sales or adoption of a product or service compared to the total theoretical market for that product or service.

A marketing-qualified lead (MQL) is a potential customer that has been reviewed by the marketing team and satisfies the criteria necessary to be passed along to the sales team.

A mix of debt and equity financing that gives the lender the right to convert to an equity interest in the company in case of default, generally after venture capital companies and other senior lenders are paid.

A category of venture capital, typically in the form of small funds and investments, targeting early-stage startups with lower capital needs.

A Minimum Marketable Feature is a small, self-contained feature that can be developed quickly and that delivers significant value to the user.

A Minimum Viable Product is the "version of a new product which allows a team to collect the maximum amount of validated learning about customers with the least effort."  The most pared-down version of a product that can still be released. An MVP has just enough features to satisfy early customers and provide feedback for future product development.

Mob Programming is a software development approach where the whole team works on the same thing, at the same time, in the same space, and at the same computer.

The process of deriving revenue from the users of your product or service.

Income that a startup can reliably anticipate for every month. To calculate MRR, multiply the total number of paying customers by the average revenue per user (ARPU) per month.

A Niko-niko Calendar is updated daily with each team member's mood for that day. Over time the calendar reveals patterns of change in the moods of the team, or of individual members.

The capability of an enterprise to deliver products or services to its customers in the most cost-effective manner possible while still ensuring the high quality of its products, service, and support.

A complete development and deployment environment in the cloud, with resources that enable a user to deliver everything from simple cloud-based apps to sophisticated, cloud-enabled enterprise applications without having to build and maintain the required infrastructure.

A collaborative marketing strategy where businesses work together to promote each other’s products or services. It leverages the strengths and audiences of each partner for mutual benefit.

The process by which managers and employees work together to plan, monitor, and review an employee’s work objectives and overall contribution to the organization.

A form of digital marketing in which brands pay only when specific actions such as clicks, sales, or leads are completed. It's a way to measure ROI on marketing activities directly.

A competitive event where founders pitch their startups to a group of people, often investors. The winners receive capital, connections, and other business resources.

A brief presentation, often created using PowerPoint, Keynote or Prezi, used to provide your audience with a quick overview of your business plan. Usually used during face-to-face or online meetings with potential investors, customers, partners, and co-founders.

A fundamental shift in business strategy. It involves changing one or more aspects of the company (e.g., target market, business model) to pursue a more lucrative opportunity.

Agile teams generally prefer to express estimates in units other than the time-honored "man-hours." Possibly the most widespread unit is "story points."

Funding round where the startup is funded by friends, family, fools, and the founders themselves. Angel investors and certain VCs may also invest in this round.

Investment funds, generally organized as limited partnerships, which buy and restructure companies. Venture capital is a type of private equity.

A product backlog is a list of the new features, changes to existing features, bug fixes, infrastructure changes or other activities that a team may deliver in order to achieve a specific outcome.

A scenario where a product satisfies a strong market demand. It is a crucial stage for startups and can significantly impact the company's success and scalability.

A new product generates non-trivial revenue and growth, proving that there was a demand for it. PMF is the first major milestone of every startup.

The product owner is a role on a product development team responsible for managing the product backlog in order to achieve the desired outcome that a product development team seeks to accomplish.

The right for investors to participate in future funding rounds to maintain their percentage ownership in the company.

A financial metric used to assess a company's financial health by revealing the percentage of revenue that exceeds the costs of goods sold (COGS). It's a measure of profitability.

An exercise that demonstrates that a product or concept not only works but will fulfill customer requirements and that customers will adopt it. A POC may uncover flaws, leading the company to revise or abandon a project.

The process of creating an early model of a product to test concepts and functionality. Prototypes range from simple mock-ups to interactive digital models, allowing designers and stakeholders to explore ideas before committing to full-scale development.

A way of preventing mistakes and defects in manufactured products and avoiding problems when delivering solutions or services to customers; which ISO 9000 defines as "part of quality management focused on providing confidence that quality requirements will be fulfilled".The supervision of non-capitalized assets (inventory) and stock items. A component of supply chain management, inventory management supervises the flow of goods from manufacturers to warehouses and from these facilities to point of sale.

Refactoring consists of improving the internal structure of an existing program's source code, while preserving its external behavior.

A funding model where an investor provides funds to a startup but not for equity. Instead, the investor is paid back a certain percentage of the business's total revenue or sales over a given period. This continues until the investor makes back a predetermined multiple of the given amount. RBF is typically used by post-revenue eCommerce and SaaS startups.

Rules of Simplicity is a set of criteria, in priority order, proposed by Kent Beck to judge whether some source code is "simple enough."

The period of time that the startup can remain in business, given the current amount of funding. It is critical for a startup as it helps determine the budgeting, strategizing, forecasting, and fundraising throughout the startup’s lifecycle.

The process in which the founders can project the performance of the startup in the future based on current data.

A period in the startup lifecycle that occurs after the startup launches a product but doesn’t see any revenue. This term is the result of plotting the shape of a company's cash flow onto a graph. The valley is the location on the graph where the cash flow is at a very low point.

What defines the startup and distinguishes it from their competitors. After reading a value proposition, the reader should have no misunderstandings about the company or what it offers.

A type of debt financing provided to venture-backed companies by specialized banks or non-bank lenders to fund working capital or capital expenses, such as purchasing equipment.

The process by which an employee earns the right to receive full benefits from the company's stock option plan or retirement plan over time. It encourages employees to perform well and remain with the company.

Velocity is the total effort estimates associated with user stories that were completed during an iteration.

Version control is not merely "good practice" but an enabler of a number of Agile practices, such as continuous integration