CONCEPT QUESTIONS FOR STARTUPS | NEP

1.    Business angels – are individual investors who provide capital to startups in exchange for equity or debt. They invest in the early stages of a startup and play an essential role by offering not just funding but also guidance, mentorship and valuable networks.

2.    Startups – are the core entities within the ecosystem. They are newly established companies that aim to grow rapidly by bringing innovative products or services to the market. This phase is characterized by high risk, rapid experimentation and a focus on securing market fit.

3.    Entrepreneurs – are the visionaries and driving force behind startups. They identify market opportunities, take risks and lead efforts to turn ideas into reality. A successful entrepreneur possesses creativity, resilience and a strong sense of leadership.

4.    Bankruptcy – Bankruptcy is a legal process through which individuals or businesses that are unable to repay their debts can seek relief from some or all of their financial obligations. It is initiated either by the debtor (voluntary bankruptcy) or by creditors (involuntary bankruptcy) and is governed by bankruptcy laws. There are different types of bankruptcy – liquidation, reorganization, repayment plan.

5.    Insurtech - Insurtech refers to the use of technology innovations designed to find cost savings and efficiency from the current insurance industry model. Insurtech is a combination of the words “insurance” and “technology,” inspired by the term fintech.

6.    IPO - IPO stands for Initial Public Offering. It is the process by which a private company offers its shares to the public for the first time, allowing investors to buy ownership in the company. This transition from a private to a public entity typically helps the company raise capital for expansion, pay off debts, or fund other business initiatives. IPOs are usually underwritten by investment banks and are listed on stock exchanges like the NYSE or NASDAQ.

7.    Liquidation is the process of closing a business and converting its assets into cash to pay off debts. It typically occurs when a company is insolvent (unable to meet its financial obligations) or when the owners decide to shut down operations.

There are two main types of liquidation:

Voluntary Liquidation – Initiated by the company's owners or shareholders when they decide to dissolve the business.

Compulsory Liquidation – Ordered by a court, usually at the request of creditors when a company cannot pay its debts.

8.    A Big Idea is a powerful, overarching concept that serves as the foundation for a business, marketing campaign, or creative project. It is a compelling, transformative insight that captures attention, inspires action, and differentiates a brand or initiative.

In different contexts, a Big Idea can mean:

Marketing & Advertising: A unique, memorable theme that drives a brand’s message (e.g., "Just Do It" by Nike).

Business & Innovation: A groundbreaking vision or solution that disrupts an industry (e.g., Tesla’s push for sustainable energy).

Philosophy & Thought Leadership: A revolutionary perspective that changes how people think about a topic (e.g., the theory of relativity).

A Big Idea is often simple but profound, making it easy to communicate and scale.

9.    MVP – given in the long answers

10. Incubators & Accelerators

     Incubators support early-stage startups with mentorship, office space, and networking.

Accelerators provide structured programs and funding to rapidly grow startups.

11. Pivoting - A strategic shift in business direction, often changing products, services, or target markets based on customer feedback and market trends.

12. Unicorn Startup - A Unicorn Startup is a privately held startup company that is valued at $1 billion or more. The term was coined by venture capitalist Aileen Lee to describe the rarity of such high-valued startups.

     Key Characteristics of Unicorn Startups:

High Valuation – Valued at $1 billion+ before going public or getting acquired.

Innovative Business Model – Disrupts traditional industries with technology-driven solutions.

Rapid Growth – Expands quickly with scalable products and services.

Strong Investor Backing – Funded by venture capitalists (VCs), private equity, or angel investors.

Global Expansion Potential – Many unicorns target international markets.

Examples of Unicorn Startups in India: Byju’s (EdTech), Zomato (FoodTech), Paytm (FinTech), Ola (Ride-sharing), Swiggy (Food Delivery)

13. Seed Funding - The initial capital raised by a startup to develop a prototype or early-stage product, usually from angel investors, venture capitalists, or incubators.

14. Series A, B, C Funding - Different rounds of funding for startups as they grow:

1. Series A – Early-stage funding to scale operations.
2. Series B – Growth-stage funding for market expansion.
3. Series C & beyond – Late-stage funding for global expansion or acquisitions.

15. Lean Startup Methodology - A business approach that focuses on quickly testing ideas, iterating based on customer feedback, and minimizing waste in product development.

16. Burn Rate - The rate at which a startup spends its capital before becoming profitable. A high burn rate can be risky without strong revenue streams.

17. Customer Acquisition Cost (CAC) - The cost associated with acquiring a new customer, including marketing, sales, and promotions. Startups aim to lower CAC while increasing customer retention.

18. Lifetime Value (LTV) - The total revenue a business expects to earn from a customer throughout their relationship with the company. A high LTV compared to CAC indicates a sustainable business model.

19. Freemium Model - A pricing strategy where a basic product or service is offered for free, while premium features require payment (e.g., Spotify, LinkedIn, Canva).

20. Growth Hacking - Creative, low-cost strategies used by startups to rapidly acquire and retain customers, often leveraging digital marketing, viral campaigns, and referrals.

21. Disruptive Innovation - A breakthrough innovation that changes or replaces existing industries, such as how Uber transformed transportation or Airbnb disrupted hospitality.

22. Elevator Pitch - A short, persuasive speech (30–60 seconds) that explains a startup’s idea, value proposition, and potential impact to investors or stakeholders.