Overview Guide Flashcards

Which funding stage typically comes FIRST in a startup's financing journey?

Answer: Seed funding

Seed funding is the earliest formal investment stage, used to validate the business concept and develop an initial product before larger rounds.

What is a 'pivot' in startup terminology?

Answer: A fundamental shift in business model or product direction based on market feedback

A pivot is a deliberate strategic change in product, customer segment, or business model when the original approach isn't gaining traction.

In the context of entrepreneurship, what is a 'burn rate'?

Answer: The rate at which a startup spends its cash reserves each month

Burn rate measures how fast a startup consumes its cash, which directly determines how many months of 'runway' remain before needing more funding.

Which analysis tool helps entrepreneurs evaluate internal strengths and weaknesses alongside external opportunities and threats?

Answer: SWOT analysis

SWOT analysis (Strengths, Weaknesses, Opportunities, Threats) is a foundational strategic planning tool that assesses both internal and external business factors.

What is 'sweat equity' in an entrepreneurial context?

Answer: Ownership stake earned by contributing labor and expertise rather than cash

Sweat equity refers to the ownership interest or value that co-founders and early employees earn by contributing their time, skills, and effort instead of financial investment.

A startup's 'runway' refers to:

Answer: The number of months the company can operate before running out of cash

Runway is calculated by dividing current cash reserves by the monthly burn rate, indicating how long the startup can survive without new revenue or investment.

Which of the following BEST describes an 'intrapraneur'?

Answer: An employee who develops new ventures or innovations within an existing organization

An intrapreneur applies entrepreneurial thinking inside a corporation, driving innovation without the risk of starting an independent business.