50 Business Terms Every Entrepreneur Should Know

In today’s fast-paced business world, keeping up with important terms and concepts is crucial, especially for startups and growing businesses. Whether you're just starting out or already deep in the entrepreneurial journey, knowing the language of business helps you navigate crucial conversations with investors, partners, and customers.

We've compiled a comprehensive list of 50 essential business terms that every entrepreneur should understand. These terms cover everything from funding and product development to customer retention and scaling your business. Use this list as a quick reference or share it with your team to build a strong foundation for success.

Business Terms You Need to Know

Here’s the list of important business words and what they mean (in alphabetical order):

Accelerator

A program that helps startups grow quickly by providing mentorship, resources, and sometimes funding in exchange for ownership.

Acquisition

When one company buys another company, often to gain its talent, technology, or market share.

Angel Investor

A person who gives money to startups in exchange for part ownership in the company.

ARR (Annual Recurring Revenue)

The amount of money a business makes from subscriptions or contracts every year.

B2B (Business to Business)

A type of business that sells products or services to other businesses, not individual consumers.

B2C (Business to Consumer)

A business that sells products or services directly to consumers (regular people).

Beta Testing

The testing of a product by a small group of people before it is released to everyone.

Bootstrap

Building and growing a business using your own money, without external help.

Burn Rate

The speed at which a company uses up its cash before it starts making money.

Buyout

When someone buys enough shares of a company to take control of it.

Cap Table

A chart showing who owns parts of a company and how much each person owns.

Churn Rate

The percentage of customers who stop using a service or product over a period of time.

Convertible Note

A loan that can be turned into shares of the company later on, usually when the company gets more funding.

Customer Acquisition Cost (CAC)

The amount of money it costs to get a new customer.

Customer Retention Rate

The percentage of customers who keep using a company’s product or service over time.

Dilution

When a company issues new shares, existing owners’ shares are worth less because there are more shares available.

Dragon

An investor or firm that earns over $1 billion from an investment in a startup.

Due Diligence

The process of carefully investigating a business before deciding to invest in it.

Equity

Ownership in a company, usually in the form of shares or stock.

Exit

When investors or founders sell their shares in a company, usually after it has grown or been bought by another company.

Exit Strategy

A plan for how the founders or investors will leave the company, such as by selling their shares.

Freemium

A business model where basic services are free, but users must pay for additional features.

Go-to-Market (GTM) Strategy

A company’s plan for how they will sell and deliver their product to customers.

Gross Margin

The difference between how much money a company makes from selling a product and how much it costs to make it, shown as a percentage.

Incubator

A program that helps new businesses grow by giving them support, mentorship, and sometimes money.

IPO (Initial Public Offering)

The first time a company offers its shares to the public to raise money by becoming a public company.

KPI (Key Performance Indicator)

A number that shows how well a company is doing in reaching its goals.

Lean Startup

A way of building a new business by starting small, testing ideas quickly, and learning from customers to reduce waste.

Lifetime Value (LTV)

The total amount of money a business expects to earn from a customer over the entire time they are a customer.

Liquidation

The process of closing a business and selling its assets to pay off debts.

MRR (Monthly Recurring Revenue)

The amount of money a business makes every month from subscriptions or contracts.

Minimum Viable Product (MVP)

The simplest version of a product that can be released to test if people want it, with just enough features to work.

Monetisation

The process of making money from a product, service, or content.

Pivot

A major change in a company’s business direction or product to better meet customer needs.

Product-Market Fit

When a product satisfies a strong market demand, meaning there are lots of customers who want it.

Revenue Model

The way a company makes money, such as through selling products, advertising, or subscriptions.

Runway

The amount of time a business can continue to operate before it runs out of money.

SaaS (Software as a Service)

A type of software that is provided over the internet, usually for a monthly or yearly fee.

Seed Funding

The first money a company raises to help start the business, often from friends, family, or angel investors.

Series A/B/C Funding

Rounds of funding that come after seed funding, used to help a company grow. Series A is the first, then Series B, and so on.

Stock Options

The right for employees to buy shares in the company at a lower price.

Sweat Equity

Ownership in a company that is given in exchange for work or time instead of money.

Table

A document that shows who owns shares in a company and how much each person owns.

Term Sheet

A document that outlines the basic terms of an investment agreement between a company and investors.

Unicorn

A startup company valued at over $1 billion.

Unit Economics

The direct cost and revenue of producing and selling one unit of a product.

Valuation

The estimated worth of a company, often used when raising money or selling the business.

Venture Capital (VC)

Money that is invested in startups by professional investors in exchange for ownership or shares.

Vesting Period

The amount of time an employee has to stay with a company before they fully own their stock options.

Waterfall Model

A step-by-step process for developing a product, where each phase must be completed before moving to the next.