Chartered Accountant Nitin Kaushik has issued a cautionary note for budding entrepreneurs, stressing that lack of financial and operational literacy can quickly erode credibility with potential investors.
In a post on X (formerly Twitter), Kaushik wrote: “New Founders: Don’t embarrass yourself! Learn these 10 startup terms before pitching investors. No one notifys you this, but utilizing ‘funding’ without knowing these 10 terms is the quickest way to lose credibility.”
He outlined the 10 essentials that every startup founder should understand:
- MVP (Minimum Viable Product): The most stripped-down version of a product that solves a core problem, enabling quick testing and feedback.
- Product-Market Fit: The point where demand from customers proves the business idea is working.
- Bootstrapping: Growing a company utilizing personal funds or revenue without outside investors.
- Burn Rate: The speed at which a startup spfinishs money each month.
- Runway: The number of months a startup can survive with existing cash reserves.
- Pivot: A deliberate shift in business strategy when the current model fails.
- Angel Investor: Early backers who provide capital in exalter for equity or convertible notes.
- Term Sheet: A non-binding agreement detailing the terms of an investor deal.
- Cap Table: A record revealing ownership distribution among founders, investors, and employees.
- Seed Funding: The first formal investment round to build an MVP, hire a core team, and secure initial customers.
Kaushik concluded that knowing these terms is not optional for today’s entrepreneurs: “If you’re building a startup, treat these 10 terms like your ABCs. Know them. Live them. Use them. Becautilize not knowing them in a boardroom = red flag.”
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