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Series A, scalability, VC… The world of startups and entrepreneurship is full of terms that can sometimes seem strange. But it is important to know them to fully understand the challenges of the technology sector. Here are the ones that you absolutely must master.
It may seem obvious, but a startup is a young innovative company, often in the development phase, that seeks to grow quickly by exploring a business model that allows it to scale up. It is distinguished by its transformative approach, intensive use of technology and a strong capacity for adaptation.
Proposing a new product, service or business model, the startup often calls on external investors to finance itself, particularly through fundraising.
Fundraising, also known as a round table, defines a process by which the startup solicits investors to obtain capital, all in exchange for a stake in its capital. This allows it to finance its growth, the development of its product or its expansion on the market.
There are different types of fundraising. Pre-seed, or pre-seed, allows financing the first stages of the project. Seed, on the other hand, will help the young shoot to develop a first viable product.
Next comes the Series A fundraising, the objective of which is to accelerate the company’s growth, by expanding its team as well as its business model. The Series B is used to subsidize large-scale expansion, such as launching in new regions, customer acquisition, etc.
The Series C and above come next. They support internationalization or the acquisition of other companies. In some cases, they precede an IPO.
Scalability, a term derived from the English ” scalability “, refers to the ability of a company, product or business model to grow rapidly without proportionally increasing its costs. For example, SaaS platforms like Slack can be defined this way, because once developed, they can be sold to a large number of users without significant additional cost.
The term scale-up refers to the accelerated growth phase of a startup that becomes a more mature company.
This is a financial entity that collects money from investors to inject it into various assets, including companies. Its objective is to generate a return on the capital invested.
200% Deposit Bonus up to €3,000 180% First Deposit Bonus up to $20,000There are several types. Venture capital, or VC in English, finances startups with high potential but high risk. This is particularly the case of Sequoia Capital, one of the most popular in Silicon Valley.
The development capital fund supports companies that are already profitable but need capital to accelerate their growth.
This term refers to an individual investor who finances startups or early-stage companies in exchange for a stake in the capital. These are often experienced entrepreneurs or executives with expertise in a specific field. In France, Anthony Bourbon is, for example, a very active business angel.
In the world of startups, valuation represents the estimation of the total financial value of a company. It reflects its future growth potential, its development prospects, the value of its technologies, its addressable market but also the quality of its management team.
Valuation varies depending on the sector and the stage of development of the startup, ranging from a few hundred thousand to several billion euros. Today, the most valuable startup in the world is SpaceX. It is followed by TikTok's parent company, ByteDance, then by OpenAI.
To put it simply, a unicorn refers to an unlisted startup valued at more than a billion dollars. However, it must meet several criteria to benefit from this title, such as rapid growth and major transformation potential for a sector.
Why the word ” unicorn ” ? Because it highlights the rare and exceptional nature of such a company in the startup ecosystem.
Bootstrapping is quite rare in the startup world. It refers to a development method in which the founder finances his project mainly with his own resources, without calling on external investors such as venture capitalists.
It has its advantages, but also its disadvantages. Startups using bootstrapping have complete control over their company, and can set up an organic and disciplined development without external pressures. On the other hand, their growth prospects are potentially slower, because financial resources are more limited. The personal risk is, moreover, higher.
Crowdfunding, or participatory financing in French, is a fundraising model where a project or a company solicits a large number of people to obtain financial contributions, generally via online platforms. In exchange, contributors receive a gift or a product. There is also a risk here, especially if the set objective is not reached.
This term corresponds to a support structure that helps entrepreneurs develop their project, by offering a set of strategic services and resources. In France, the most famous is undoubtedly Station F, in Paris.
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