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Startup Glossary

Master the essential terminology, metrics, and concepts every entrepreneur needs to understand. From CAC to TAM, unit economics to product-market fit.

32 Terms23 Essential6 Categories

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Financial Metrics

Key financial indicators used to measure business health, profitability, and unit economics.

Customer Acquisition Cost (CAC)

The total cost of acquiring a new customer, including marketing and sales expenses.

Customer Lifetime Value (LTV/CLV)

The total revenue a business can expect from a single customer account throughout their relationship.

The ratio between customer lifetime value and customer acquisition cost, measuring unit economics health.

Monthly Recurring Revenue (MRR)

The predictable, recurring revenue generated each month from subscription customers.

Annual Recurring Revenue (ARR)

The annualized value of recurring revenue, typically MRR multiplied by 12.

The rate at which a company spends its cash reserves, typically measured monthly.

The amount of time a company can operate before running out of cash.

The percentage of revenue remaining after deducting direct costs of goods sold.

The direct revenues and costs associated with a single unit of your business model.

The time required to recover the cost of acquiring a customer through their revenue.

Break-Even Point

The point at which total revenue equals total costs, resulting in neither profit nor loss.

Market Analysis

Terms and metrics used to evaluate market size, opportunity, and competitive landscape.

Total Addressable Market (TAM)

The total market demand for a product or service if 100% market share were achieved.

Serviceable Addressable Market (SAM)

The portion of TAM that your product can actually serve given your business model.

Serviceable Obtainable Market (SOM)

The realistic share of SAM you can capture in the near term given competition and resources.

Compound Annual Growth Rate (CAGR)

The mean annual growth rate over a specified time period, assuming growth compounds.

The percentage of total market sales captured by a company or product.

Competitive Landscape

An analysis of all competitors, alternatives, and substitutes in your market.

Validation Criteria

Factors used to assess the viability and potential of a business idea.

Market Potential

An assessment of the overall opportunity size and growth trajectory of a target market.

The practical ability to execute and deliver a product or service given available resources.

The ability of a business to grow revenue without proportionally increasing costs.

Uniqueness / Differentiation

The distinctive qualities that set a product or business apart from competitors.

Profitability Potential

The likelihood and timeline for a business to generate sustainable profits.

Startup Fundamentals

Core concepts and terminology every entrepreneur should understand.

Minimum Viable Product (MVP)

The simplest version of a product that can be released to test core assumptions with real users.

Product-Market Fit (PMF)

The degree to which a product satisfies strong market demand.

Moat (Competitive Moat)

Sustainable competitive advantages that protect a business from competitors.

Growth Metrics

Indicators that measure business growth, retention, and engagement.

The percentage of customers or revenue lost during a specific time period.

Net Revenue Retention (NRR)

The percentage of recurring revenue retained from existing customers, including expansion.

Average Revenue Per User (ARPU)

The average revenue generated per user or account over a specific period.

Funding & Investment

Terms related to startup financing, fundraising, and investor relations.

Pre-Seed Funding

The earliest stage of startup funding, typically from founders, friends, family, or angels.

Early-stage funding to develop product, hire initial team, and achieve product-market fit.

Series A Funding

The first major institutional VC round, typically raised after achieving product-market fit.

Startup Valuation

The estimated worth of a startup, used to determine equity exchange in funding rounds.

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