Glossary

Startup terms, explained simply

Every concept you need to know as a founder. Clear definitions, real examples, and how each connects to building your business.

Angel Investor

An individual who invests their own money in startups, usually at the earliest stages.

Annual Recurring Revenue (ARR)

The annualized value of your recurring subscription revenue.

Burn Rate

How fast your startup is spending cash each month.

Bootstrapping

Building a business without external funding, using revenue and personal savings.

Break-Even Point

The point where your total revenue equals your total costs, resulting in zero profit or loss.

Customer Discovery

The process of talking to potential customers to validate your assumptions about their problems.

Competitive Advantage

A sustainable edge that makes it hard for competitors to replicate your success.

Customer Acquisition Cost (CAC)

The total cost to acquire one new customer.

Churn Rate

The percentage of customers who stop using your product in a given period.

Content Marketing

Creating valuable content to attract, engage, and convert potential customers.

Contribution Margin

The amount each sale contributes toward covering fixed costs and generating profit.

Equity Dilution

The reduction in a founder's ownership percentage when new shares are issued to investors.

Go-to-Market Strategy

Your plan for reaching and acquiring your first customers.

Iteration

The process of making incremental improvements based on user feedback and data.

Lean Startup

A methodology for developing products through validated learning and rapid iteration.

Lifetime Value (LTV)

The total revenue a customer generates over their entire relationship with your business.

Monthly Recurring Revenue (MRR)

The predictable revenue your business generates every month from subscriptions.

Minimum Viable Product (MVP)

The simplest version of your product that lets you test your core hypothesis with real users.

North Star Metric

The single metric that best captures the core value your product delivers to customers.

Net Revenue Retention (NRR)

The percentage of revenue retained from existing customers after accounting for churn, downgrades, and upgrades.

Product-Market Fit

When your product satisfies strong market demand.

Pivot

A fundamental change in your business strategy based on what you've learned.

Positioning

How your product occupies a distinct place in your customer's mind relative to alternatives.

Product-Led Growth (PLG)

A growth model where the product itself drives acquisition, retention, and expansion.

Pre-Seed Funding

The earliest stage of startup funding, typically from personal savings, friends and family, or angel investors.

Pitch Deck

A presentation (usually 10-15 slides) that tells your startup story to potential investors.

Product Roadmap

A strategic plan showing what you're building, when, and why.

Pre-Money Valuation

The value of your startup before receiving new investment.

Runway

How many months your startup can survive before running out of cash.

Revenue Multiple

A valuation method that prices a company as a multiple of its annual revenue.

Serviceable Addressable Market (SAM)

The portion of TAM you can realistically serve with your current product and business model.

Serviceable Obtainable Market (SOM)

The portion of SAM you can realistically capture in the near term.

Seed Round

The first significant round of venture funding, typically $500K-$5M.

Total Addressable Market (TAM)

The total revenue opportunity if your product captured 100% of the market.

Target Market

The specific group of customers most likely to buy your product.

Unit Economics

The revenue and costs associated with a single unit of your business (usually one customer).

Unique Selling Proposition (USP)

The single most compelling reason a customer should choose you over competitors.

Value Proposition

A clear statement of the unique value your product delivers to customers.

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