As someone who changed careers into tech after working in public schools and nonprofits for years, all the new terminology and acronyms were jarring and mysterious, and new ones are still surfacing all the time! Below are some common terms, job functions and acronyms you might hear as people talk about the business in a startup.
Have additional terms or acronyms you’d like to see included in this list? Feel free to share and I’ll keep building this out. Hopefully this can be a resource for people about to make the shift into tech companies, or those who have been there for a while without looking up the terms they’re less familiar with.
As someone in software engineering, there are a whole host of additional terms used to discuss different parts of the product and software lifecycle — those aren’t included here, but there are other resources dedicated just to terms used in agile or other methodologies!
Finance & Funding
ARR/MRR: Annual/Monthly Recurring Revenue
This is the primary metric startups use to measure their progress — it is the amount of money customers have signed contracts to pay. The important thing here though is the word recurring. This means that assuming a given customer re-signs their contract when the current one expires, this amount will recur. What that means is that one-time pieces of the contract are not included- professional services, implementation costs, etc.
As always, revenue is not the same as profit!
Options, Vesting, and Exercising
When people are offered roles at startups, part of their compensation package is often stock options — these are options to buy stocks in the company before they are available on the public market and they are typically guaranteed at the value they have at the time the option is granted — this price is also called a strike price.
Typically, someone cannot buy all of the options they’re granted immediately, they vest over a period of time, thereby becoming available to buy
To buy those options is to exercise them.