STARTUP GLOSSARY
- Accelerators: Programs or organizations that support early-stage startups by providing mentorship, resources, and funding.
- Accounts Payable: Amount of money a business owes to suppliers for goods or services purchased on credit.
- Accounts Receivable: Amount of money owed to a business by its customers for goods or services provided on credit.
- Angel Investors: High-net-worth individuals who provide capital to startups or early-stage companies in exchange for equity.
- Assets: Resources or properties owned by a company that have economic value.
- Average Conversion Rate (ACR): The average rate at which potential customers convert to actual customers.
- Average Order Value (AOV): The average value of each order placed by customers.
- Average Days Payable: The average number of days it takes for a company to pay its suppliers.
- Average Days Receivable: The average number of days it takes for a company to collect payments from its customers.
- Balance Sheet: A financial statement that presents a company's assets, liabilities, and shareholders' equity at a specific point in time.
- Book Value (Investment): The value of an investment as recorded in the accounting books.
- Burn rate: The rate at which a startup spends its capital to cover expenses before becoming profitable.
- Capital Expenditures (Capex): Expenditures made by a company to acquire, upgrade, or maintain physical assets.
- Cash Flow Statement: A financial statement that shows the inflows and outflows of cash during a specific period.
- Churn Rate: The rate at which customers stop doing business with a company.
- CLV/CAC Ratio: The ratio between the customer lifetime value and the customer acquisition cost.
- Corporate Taxes: Taxes paid by corporations on their profits.
- Cost of Goods Sold (COGS): The direct costs directly associated with producing goods or services.
- Consumer Price Index (CPI): A measure of the average change in prices paid by consumers for a basket of goods and services over time.
- Customer Acquisition Channels: Methods used by businesses to attract and gain new customers.
- Customer Acquisition Cost (CAC): The cost associated with acquiring a new customer.
- Customer Acquisition Rate (CAR): The rate at which a business gains new customers.
- Customer Lifetime Value (CLV): The predicted net profit attributed to the entire future relationship with a customer.
- Customer Retention Rate (CRR): The percentage of customers that a business retains over a given period.
- Days Payable Outstanding (DPO): The average number of days a company takes to pay its suppliers for goods and services received on credit.
- Days Sales Outstanding (DSO): The average number of days it takes a company to collect payment from its customers for credit sales.
- Debt Financing: Borrowed funds obtained by a company, usually through loans or bonds.
- Depreciation: The allocation of the cost of an asset over its useful life.
- EBITDA: Earnings Before Interest, Taxes, Depreciation, and Amortization: A measure of operating performance, excluding non-operating expenses.
- EBITDA Margin: EBITDA as a percentage of total revenue, used to assess profitability.
- Employee Roster: A list of employees within an organization, often including their roles and contact information.
- Ending Cash: The total cash balance at the end of a specific period.
- Equity Investment: Funds invested in a company by shareholders in exchange for ownership.
- Financial Forecast: A projection of future financial performance based on historical data and expected trends.
- Fixed Expenses: Expenses that do not change regardless of the level of business activity.
- Gross Margin: The difference between revenue and the cost of goods sold, expressed as a percentage.
- Guardrails: Predetermined limits or constraints that act as safety measures to prevent errors, unrealistic projections, and potential issues.
- Interest Expense: The cost of borrowing funds, usually incurred through interest payments on loans or debt.
- Interest Grace Period: A designated duration during which the borrower is exempt from paying interest on a loan.
- Key Performance Indicators (KPIs): Quantifiable measures used to assess the performance of a business or organization.
- Liabilities: Debts or obligations owed by a company to creditors or other parties.
- Mezzanine Financing: A hybrid of debt and equity financing that provides funds for expansion or acquisition.
- Net Income: The total profit or loss of a company after all expenses, taxes, and deductions have been accounted for.
- Net Margin: Net income as a percentage of total revenue, used to assess profitability.
- Operating Cash Flows: Cash generated or used by a company's normal business operations.
- Operating Expenditures (Opex): Day-to-day expenses incurred by a company to maintain its operations.
- Pre-Seed Funding: Early-stage financial support for startups, laying the foundation for development and growth.
- Principal Grace Period: A specified period during which the borrower is not required to make principal payments on a loan.
- Private Equity: Investments made in private companies that are not publicly traded.
- Profit & Loss: A financial statement that shows a company's revenues, expenses, and net income or loss for a specific period.
- Revenue: The total income generated by a company from its normal business activities.
- Runway: Period of time a company or startup can continue operating without running out of funds.
- Sale Channel: The method or platform through which products or services are sold.
- Sales Cycle: Process of guiding potential customers from initial awareness of a SaaS product to making a purchase.
- Sensitivity Analysis: An analysis that determines how changes in certain variables affect the outcome of a particular scenario.
- Series A: Funding stage following seed funding, typically used for business expansion.
- Series B: Funding stage following Series A, usually used to further grow and scale a company.
- Series C: Funding stage following Series B, often focused on scaling operations or entering new markets.
- Seed Funding: Capital provided to startups after the pre-seed stage for accelerated development and growth.
- Sources and Uses of Funds: A statement that shows where the funds came from and how they were used.
- Startup Models: Your trusted financial modeling experts, empowering startups to secure the financing they deserve through reliable financial modeling.
- Variable Expenses: Expenses that change in proportion to the level of business activity.
- Venture Capitalists: Investors who provide capital to startups or early-stage companies in exchange for equity.
- Working Capital: The difference between a company's current assets and current liabilities.