Someone new to the world of entrepreneurship will notice right away that entrepreneurs have an interesting way of speaking. From “unicorn” to “bootstrapping” to “foodpreneur,” entrepreneurs use a lot of strange language to describe what they do. By combining words, or by assigning new meaning to old ones, they have created a whole new vocabulary to better communicate their needs and ideas in an ever-evolving ecosystem. The EntrepreLingo Series is an effort to fill our readers in on some of the weirder—or less straightforward—terms you’re sure to hear in an entrepreneurial environment. So far, we’ve covered: A, B, C, D and E, F through H, I through L, M and N and P and Q. This week’s installment is brought to you by the letter R.
This term, coined by Paul Graham, is used to describe a startup that makes just enough money to cover basic expenses and not much else; in a ramen profitable venture, the founders are left with just enough money to buy pre-packaged ramen noodles for sustenance.
To “ramp up” is to increase the output of a company’s product or service in anticipation of an increase in demand. Ramping up can occur during the early stages of a startup, or it can occur when a company releases a new product or service.
Recapitalization occurs when a company restructures its debts and equity to create a more stable capital structure. During recapitalization, a company may exchange one form of financing for another; for example, a company may opt to remove preferred stocks in favor of bonds.
A roadmap is a visual planning device that defines where your business is, where you want it to go and how you plan to get there.
Rockstar (or Wizard, Ninja)
These terms—most popular in reference to the developer community—are used to describe people who are masters of their craft. “Rockstar,” “wizard” and “ninja” have earned a bad reputation, however, for being indicators that an employer hasn’t researched his or her company’s needs before seeking developer talent.
ROI (Return On Investment)
ROI is a profitability measurement, calculated by dividing your company’s net profit by its net worth (or total assets).
Rounds are a series of funding phases through which startups raise capital. The seed round is the initial funding used to launch the business, while subsequent rounds—referred to as “Series [A-F]—are used to grow and expand the business.
The runway is how much time your company has left before it goes out of business, assuming your current income and expenses remain constant; your runways is calculated by dividing your available cash by your burn rate.