Startup Terminology & Acronyms: A Glossary

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.

VC: Venture Capitalist

Venture capitalists provide funding for startups before they go public. They usually invest via funds or partnerships, though individuals (usually called “angel investors”) do invest in very early-stage startups, where the amount of money required is smaller. They invest their money in exchange for shares/equity in the company.

Series A/B/C…

Series A funding is typically the first post-seed (made by much smaller investors, often in the tens or hundreds of thousands of dollars) round of funding, typically in the millions of dollars, made by venture capitalists or private equity firms. B, C, and so on, rounds of funding indicate subsequent rounds, typically in increasing amounts of money.

Business to Business/Consumer: B2B & B2C

This describes who the company sells to — is it other companies, or directly to individuals? An app that you use or buy on your phone, such as to order your groceries, is a B2C product. Salesforce is a common example of a B2B product — something that is purchased and used by companies and teams.

GTM: Go to Market

A go-to-market strategy outlines the plan or strategy, from marketing to sales execution, of how a business will deliver its value proposition to prospective buyers.

IPO: Initial Public Offering

Also called “going public,” this means individuals can buy shares in a company on the public market, allowing companies to raise capital from public investors.

Job Functions

IC: Individual contributor

An individual contributor is not a specific job function, but is a term used to refer to anyone who doesn’t manage other people, regardless of their department or job function.

ADR/SDR/BDR: Account/Business/Sales Development Representative

Sales development representatives are responsible for early-pipeline sales generation — this can vary from cold-calling and other outreach, to responding to inbound inquiries, but they are often responsible for qualifying leads and determining their level of interest or specific needs, before passing the lead on to an Account Executive.

AE: Account Executive

An Account Executive is a sales representative, responsible for closing deals and bringing in business. This job function can vary quite a bit from company to company. In some companies, they are also responsible for sourcing their own sales opportunities, in some they are not (in many where they are not, that is the responsibility of an ADR/SDR, as discussed above).

AM: Account Manager

Account Managers are responsible for post-sales revenue generation, either through renewals or expansion or both. They often work closely with CSMs.

CSM: Customer Success Manager

As with other roles, the responsibilities of this role can vary quite a bit from company to company, but at the highest level, they are responsible for managing relationships with customers post-sale. This can include implementation, post-implementation strategy support, customer service, or account management — again all depending on how an individual company divides these responsibilities among roles.

Metrics & Goals

NPS: Net Promoter Score

We’ve probably all seen those popups when using various sites or apps that ask you “On a scale of 1 to 10, how likely are you to recommend <product> to a friend?” That’s used to calculate the NPS. People who rate a 9 or 10 are noted as “promoters”, 7s and 8s are “neutral” and 6 and below are “detractors”. Scores can range from -100 to 100, and are calculated by subtracting the percentage of detractors from the percentage of promoters. Sources vary on what qualify as “good”, but generally seem to agree that anything over 0 is good, as it signifies that the majority of customers are loyal, with averages for SaaS companies generally falling around 30.

CSAT: Customer Satisfaction

Measures customer satisfaction, usually as a percentage between 0 and 100. Where NPS measures a person’s loyalty to a company, CSAT measures their satisfaction with a specific product or service.

OKR: Objectives and Key Results

A strategic framework for different units of the business to define the most important things for them to accomplish in a given timeframe (usually a quarter). Each business unit typically chooses 3–5 key results.

KPI: Key Performance Indicator

KPIs can be difficult to differentiate from OKRs, and there can be some overlap, but KPIs are used to measure performance within the framework created by OKRs. If you’re not part of the executive team building out what the OKRs & KPIs should be, knowing the intricacies of the differences between the two is likely not particularly high priority for you!

Senior Software Engineer | www.adriennedomingus.com

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