Startup Terms, Explained

Startup

A temporary organization designed to search for a repeatable and scalable business model, rather than simply execute a known business model.

Founder

An individual who starts a startup and takes responsibility for developing the idea, finding customers, building the business, and creating a viable company.

Co-founder

An individual who starts and builds a startup together with one or more founders, sharing responsibility, ownership, and key decisions.

MVP

A Minimum Viable Product is the simplest version of a product that allows a startup to test its key assumptions and learn from real customers with minimal time and resources.

Pivot

A significant change in a startup's product, customer, business model, or strategy based on what has been learned from customers and market evidence.

Product-Market Fit

The point at which a product solves a meaningful problem for a specific market and customers consistently want, use, and pay for it.

Traction

Evidence that a startup is gaining real market adoption, demonstrated through indicators such as customers, revenue, usage, retention, growth, or successful partnerships.

Runway

The amount of time a startup can continue operating before it runs out of cash, based on its available funds and rate of spending.

Burn Rate

The rate at which a startup spends its cash to operate, typically measured on a monthly basis.

Scalability

The ability of a business to grow its customers, revenue, or operations without a proportional increase in costs, resources, or complexity.

Frameworks widely used across the startup and innovation world — including by Y Combinator, IDEO, and the Stanford d.school — for building the right thing and testing it quickly.

Lean Startup

A methodology (developed by Eric Ries) for developing businesses and products that shortens product-development cycles by adopting a combination of business-hypothesis-driven experimentation, iterative product releases, and validated learning.

Build-Measure-Learn

The core feedback loop of the Lean Startup method: build a minimum viable product, measure how customers actually respond, and learn whether to persevere or pivot — then repeat.

Validated Learning

Rigorous, empirical evidence — gathered by testing a hypothesis with real customers — that a startup's assumptions about its business are true, as distinct from opinions, guesses, or vanity metrics.

Innovation Accounting

A quantitative approach (from Lean Startup) to measuring progress when the standard metrics of an established business don't yet apply — setting a baseline, tuning the engine, and deciding whether to pivot or persevere.

Design Thinking

A human-centered, iterative approach to innovation (popularized by the Stanford d.school and IDEO) that moves through Empathize, Define, Ideate, Prototype, and Test — grounding solutions in a deep understanding of real user needs rather than assumptions.

Human-Centered Design (HCD)

A creative approach to problem-solving that starts with the people you're designing for and ends with solutions tailored to their needs — the foundation IDEO and the d.school built Design Thinking on.

Empathize, Ideate, Prototype, Test

Four of the five core Design Thinking stages: Empathize (understand real users through observation and engagement), Ideate (generate a wide range of possible solutions), Prototype (build a quick, low-cost version of an idea), and Test (put the prototype in front of real users and learn from their reaction).

Design Sprint

A time-boxed, five-phase process (originated at Google Ventures) for answering critical business questions by designing, prototyping, and testing ideas with users — typically compressed into about a week.

Pre-seed

The earliest stage of startup funding, typically used to validate a problem, develop an initial product, and test the business idea before raising a larger seed round.

Seed Funding

Early-stage funding used to develop the product, validate product-market fit, acquire initial customers, and build the foundation for growth.

Series A

The first major institutional funding round, typically raised by startups with validated demand and early traction to develop a repeatable business model and scale.

Series B

A later-stage funding round used by startups with a proven business model and significant traction to accelerate growth, expand markets, and scale operations.

Angel Investor

An individual who invests their own money in an early-stage startup, often providing funding, expertise, mentorship, and connections in exchange for equity or another form of ownership.

Venture Capital (VC)

Investment from a professional fund into high-growth startups in exchange for equity, typically targeting companies with the potential to achieve significant scale and returns.

Private Equity

Investment in established companies, usually involving larger amounts of capital and a focus on improving, expanding, or restructuring the business to generate returns.

Equity

Ownership in a company, usually represented by shares. When a founder gives investors equity, the investor receives a portion of ownership in exchange for their investment.

Valuation

The estimated monetary value of a company, used to determine how much ownership an investor receives for a given investment.

Cap Table

A capitalization table that records who owns a company, how much they own, and how ownership changes as shares, options, and investments are issued.

Convertible Note

A loan that can convert into equity in a future funding round, usually under agreed terms such as an interest rate, maturity date, valuation cap, or discount.

Grant

Non-dilutive funding provided by a government, institution, foundation, or other organization to support a specific project, activity, or objective, without requiring ownership in return.

Technology Business Incubator

An organization that supports early-stage, technology-based startups with resources such as workspace, mentorship, funding linkages, and networking — typically based at a university, research institution, or government program, and working with companies over a longer, less structured timeline than an accelerator.

Accelerator

A fixed-term, cohort-based program that helps startups grow quickly through mentorship, structured curriculum, and often a small investment — usually culminating in a demo day, and shorter and more intensive than an incubator.

Mentor

An experienced individual — often a founder, executive, or subject-matter expert — who provides guidance, feedback, and connections to a startup founder, without necessarily holding equity or a formal role.

Co-working Space

A shared workspace used by founders, freelancers, and small teams, offering desks, meeting rooms, and often a built-in community of other entrepreneurs.

Demo Day

An event, usually at the end of an accelerator program, where startups pitch their progress to an audience of investors, mentors, and press.

Pitch Deck

A short slide presentation founders use to explain their business to investors, partners, or customers — typically covering the problem, solution, market, traction, team, and funding ask.

Open Innovation

An approach where an organization looks outside its own walls — to startups, researchers, or the public — to source and develop new ideas and solutions, rather than relying only on internal R&D.

Startup Ecosystem

The network of founders, startups, investors, mentors, incubators, accelerators, universities, and government bodies in a given place, whose interactions and support for one another determine how easily new companies can start and grow there.

Intellectual Property

Legal rights over creations of the mind — including inventions, designs, brand names, and creative works — that allow an owner to control and benefit from their use.

Patent

A government-granted right that gives an inventor exclusive control over an invention for a limited period, in exchange for publicly disclosing how it works.

Trademark

A recognizable sign, name, or logo legally registered to identify a company's products or services and distinguish them from competitors.

Copyright

Legal protection automatically given to an original creative work — such as writing, software, images, or music — giving the creator exclusive rights to reproduce, distribute, and adapt it.

Industrial Design

Legal protection for the unique visual appearance of a product — its shape, pattern, or ornamentation — as distinct from how the product functions.

NDA

A Non-Disclosure Agreement is a legal contract in which the parties agree to keep specified information confidential, commonly used before sharing sensitive business, product, or research details with a potential partner or investor.

Sole Proprietorship

A business owned and run by one person, with no legal distinction between the owner and the business — the simplest and most common structure for a solo founder in the Philippines, registered with the DTI.

Corporation

A business structure that is legally separate from its owners, able to own property, incur debt, and be taxed independently — in the Philippines, registered with the SEC.

DTI Registration

Registration of a business name with the Department of Trade and Industry, required for a sole proprietorship operating in the Philippines.

SEC Registration

Registration with the Securities and Exchange Commission, required for a partnership or corporation operating in the Philippines.

Terms and acronyms specific to how Baguio City's own innovation ecosystem is organized.

Incubator Baguio

A City Government of Baguio initiative, established through City Ordinance No. 063, Series of 2023, that connects government, academia, industry, researchers, startups, and communities to strengthen Baguio's innovation ecosystem.

Baguio City Research and Innovation Alliance

The formal body created by Ordinance No. 063, Series of 2023, under which Incubator Baguio operates.

Research and Innovation Agenda (RIA)

Baguio City's guiding framework for research and innovation priorities, which Incubator Baguio's programs and connections are organized around.

Ordinance No. 063, Series of 2023

The City Ordinance that formally established Incubator Baguio and the Baguio City Research and Innovation Alliance.

CPDSO

The City Planning, Development and Sustainability Office — the City Government office under which the Baguio City Research and Innovation Alliance was created.

Lifecycle Stage

How a startup's progress is tracked on this platform, from Idea (concept stage, pre-product) to MVP (early product in testing) to Launch (live in market) to Growth (scaling an established product).