Startup Glossary
Clear definitions for 40+ startup terms — from MRR and CAC to SAFEs and cap tables. Each term links to the relevant calculator.
Essential Terms
MRR
The predictable, normalized revenue your business generates every month from active subscriptions.
ARR
The annualized value of your subscription revenue — MRR × 12.
Churn Rate
The percentage of customers or revenue that cancels within a given period.
CAC
The fully-loaded cost to acquire one new paying customer.
LTV
The total revenue a customer is expected to generate over their entire relationship with your company.
Runway
How many months your startup can operate before running out of cash.
SAFE
Simple Agreement for Future Equity — a popular early-stage investment instrument that converts to equity at a later funding round.
Convertible Note
A short-term debt instrument that converts into equity at a future funding round.
Startup Valuation
The estimated total worth of your company, used to determine how much equity investors receive.
PMF
The point at which your product satisfies a strong market demand — the most important milestone for any startup.
A/B Testing
A controlled experiment that compares two variants of a product or page to determine which performs better.
Angel Investor
A high-net-worth individual who invests personal capital in early-stage startups.
Annual Recurring Revenue
ARRThe annualized value of your subscription revenue — MRR × 12.
Average Revenue Per User
ARPUThe average monthly (or annual) revenue generated per active customer.
Bootstrapped
Building a company using only revenue and personal savings — without external investment.
Break-even Point
The point at which total revenue equals total costs and your startup stops losing money.
Burn Rate
How much cash your startup spends each month, net of any revenue.
Capitalization Table
Cap TableA spreadsheet showing the equity ownership structure of your company.
Churn Rate
The percentage of customers or revenue that cancels within a given period.
Cliff
The minimum period before any equity vests — typically 12 months.
Convertible Note
A short-term debt instrument that converts into equity at a future funding round.
Customer Acquisition Cost
CACThe fully-loaded cost to acquire one new paying customer.
Equity Dilution
The reduction in existing shareholders' ownership percentage when new shares are issued.
Equity Split
How ownership of a company is divided among co-founders at the start.
ESOP / Option Pool
ESOPA pool of shares reserved for current and future employee equity compensation.
Go-to-Market Strategy
GTMThe plan for how you will reach and convert your target customers.
Lifetime Value
LTVThe total revenue a customer is expected to generate over their entire relationship with your company.
Liquidation Preference
An investor's right to receive their money back (or a multiple of it) before founders and employees in a sale or liquidation.
Minimum Viable Product
MVPThe simplest version of a product that delivers enough value to acquire early customers and generate learning.
Moat
A durable competitive advantage that protects a business from competitors.
Monthly Recurring Revenue
MRRThe predictable, normalized revenue your business generates every month from active subscriptions.
Net Promoter Score
NPSA customer satisfaction metric that measures how likely customers are to recommend your product.
Net Revenue Retention
NRRHow much revenue you retain from existing customers after expansions, contractions, and churn.
OKR
OKRObjectives and Key Results — a goal-setting framework used to align teams around measurable outcomes.
Pitch Deck
A short presentation that founders use to explain their startup to potential investors.
Pivot
A structured change in strategy in response to market feedback, while preserving the core team and assets.
Pre-money Valuation
Your company's value before new investment capital is added.
Product-Market Fit
PMFThe point at which your product satisfies a strong market demand — the most important milestone for any startup.
Revenue Run Rate
An annualized projection of revenue based on current performance.
Runway
How many months your startup can operate before running out of cash.
SaaS Pricing Strategy
How you structure and price your software subscription to maximize revenue and growth.
SAFE
SAFESimple Agreement for Future Equity — a popular early-stage investment instrument that converts to equity at a later funding round.
Series A / B / C Funding
Series RoundsSequential rounds of institutional venture capital funding as a startup grows.
Startup Valuation
The estimated total worth of your company, used to determine how much equity investors receive.
TAM / SAM / SOM
A framework for sizing market opportunity: Total Addressable Market, Serviceable Addressable Market, and Serviceable Obtainable Market.
Term Sheet
A non-binding document outlining the key terms and conditions of an investment.
Traction
Evidence that your startup is creating real value — measured by growth in users, revenue, or other key metrics.
Unit Economics
The direct revenues and costs associated with a single unit of your business — typically one customer.
Vesting Schedule
The timeline over which equity ownership is earned, typically over 4 years.
Viral Coefficient
A measure of how many new users each existing user generates through referrals.