Shark Tank India’s Glossary of Startup Terms

Excitement is in the air as the highly anticipated Season 3 of “Shark Tank India” has already begun shooting.

With three new sharks on board, including Deepinder Goyal, the founder and CEO of Zomato, Ritesh Agarwal, the founder and CEO of Oyo Rooms, and Azhar Iqubal, founder and CEO of InShorts, the buzz surrounding the show is visible.

But, if you’ve ever watched the show and scratched your head at some of the fancy words the sharks often use, you’re not alone. Many people find those terms hard to understand and this spoils the viewing experience too.

Don’t worry; we’ve got your back.

In this article, we’re going to break down all those puzzling startup terms for you in the simplest way possible.

So, whether you’re planning your startup, thinking about investing, or just watching the show for fun, you won’t be left wondering what on earth they’re talking about.

Shark Tank India’s Key Terms Explained

1. Equity: Equity refers to ownership in a company. When you invest in a startup and receive equity, you become a partial owner and share in the company’s success (or failure).
2. Valuation: Valuation is the estimated worth of a startup. It helps determine how much of the company’s ownership you get in exchange for your investment.
3. Pitch: A pitch is a short presentation where business owners explain their business idea, goals, and why they need funding to potential investors or “sharks.”
4. Revenue: Revenue is the money a business earns from selling its products or services. It’s a key metric used to assess a company’s financial health.
5. Equity Stake: An equity stake is the portion of a company’s ownership that an investor receives in exchange for their investment. It represents a share of the company’s profits and losses.
6. Equity Dilution: Equity dilution occurs when a startup issues more shares, reducing the ownership percentage of existing shareholders, including founders and early investors.
7. Prototype: A prototype is an early, often basic, version of a product used to test and refine the concept before mass production.
8. Valuation Negotiation: This is the process of haggling or bargaining to determine the startup’s worth and the equity stake that investors will receive in exchange for their funding.
9. Intellectual Property (IP): Intellectual property includes patents, trademarks, copyrights, and trade secrets that protect a startup’s unique ideas, products, or branding from being copied by others.
10. Runway: Runway is the time a startup can sustain its operations with the available funds. It’s a critical factor in assessing the financial health of a company.
11. Burn Rate: The burn rate is the rate at which a startup spends its capital or funds to cover expenses. It helps determine how long a company can operate before running out of money.
12. Equity Valuation: Equity valuation is the process of determining the value of a company’s ownership shares, which is crucial when attracting investors or selling a portion of the business.
13. Exit Strategy: An exit strategy is a plan outlining how and when founders and investors intend to leave or sell their ownership in a startup, often through methods like acquisition or initial public offering (IPO).
14. Due Diligence: Due diligence is the research and investigation conducted by investors to assess a startup’s financial, legal, and operational aspects before making an investment decision.
15. ROI (Return on Investment): ROI is a measure of the return or profit gained from an investment. It helps investors determine the financial success of their investments in a startup.
16. Licensing: Licensing involves granting permission to others to use a startup’s intellectual property, like trademarks or technology, in exchange for licensing fees or royalties.
17. Equity Crowdfunding: Equity crowdfunding is a way for startups to raise funds by offering equity to a large number of investors through online platforms or crowdfunding campaigns.
18. MVP (Minimum Viable Product): An MVP is the simplest version of a product that allows a startup to test its concept with early users and gather feedback before building a complete product.
19. Bootstrapping: Bootstrapping is the practice of funding a startup’s growth using personal savings, revenue generated by the business, or minimal external investment, allowing founders to maintain control over the company.
20. EBITDA Positive: EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) Positive means that a startup’s operational earnings are sufficient to cover its operating expenses, excluding interest, taxes, and non-operational costs, indicating financial health.
21. Scalability: Scalability is a startup’s ability to expand its operations, products, or services without a proportional increase in costs, maintaining efficiency as it grows.
22. Freemium: Freemium is a business model where a startup offers a basic version of its product or service for free while charging for premium features or services.
23. Liquidation: Liquidation occurs when a startup is dissolved, and its assets are sold to pay off debts and distribute any remaining funds to shareholders, often signaling failure or closure.
24. Angel Investor: An angel investor is an individual who provides early-stage funding to startups in exchange for equity or convertible debt, offering financial support and mentorship.
25. KPI (Key Performance Indicator): KPIs are specific, measurable metrics used to evaluate the performance and success of a startup, helping measure progress toward its goals.

Additional Terms From Shark Tank India Season 3

• Royalty: This refers to a payment made by a licensee to a licensor for the right to use their intellectual property (like a brand name, design, or technology) in exchange for a percentage of their sales. In Shark Tank India, a Shark might propose a deal where they invest in exchange for a royalty on every unit sold by the entrepreneur.

• Advisory Stake: This is a small equity stake offered to a Shark in exchange for their guidance and mentorship. The Shark may not invest a significant amount but provides valuable advice and connections to help the business grow.

These were some of the major terms often used by Sharks during the show.

Do you have any other terms in mind?

You can share that in the comment and we will help you understand the meaning in a very simple way. You can share this article with your colleagues or with someone who is a big-time fan of the reality show Shark Tank India.