The complete startup glossary
Every term a founder runs into — in a term sheet, a board meeting, an investor's first ten questions, or a product review. All of them, A to Z, explained in plain English.
No filler definitions that just restate the acronym. Where a term has a catch — a place founders reliably get burned — I say so.
A
A/B testing
Showing two versions to two groups and measuring which performs better. Useful for optimising what exists; useless for deciding what to build — you can A/B your way to a local maximum and never notice you're on the wrong hill.
AARRR funnel (pirate metrics)
Acquisition, Activation, Retention, Referral, Revenue — the five stages of a customer's life. A checklist for finding where you leak.
ABM (Account-Based Marketing)
Treating individual target accounts as markets of one: bespoke outreach to a named list instead of casting a wide net. Works when your ACV justifies the effort.
Account executive (AE)
The salesperson who owns the deal from qualified opportunity to signature. The SDR opens; the AE closes.
Acqui-hire
An acquisition made for the team, not the product. Usually a soft landing: founders get jobs, investors get a fraction of their money back, the product gets shut down.
Activation
The moment a new user first experiences real value. Getting people to activate is nearly always higher leverage than getting more people to sign up.
Activation rate
Share of signups that reach that first-value moment. If it's low, buying more traffic just pours water into a bucket with a hole.
ACV (Annual Contract Value)
The average yearly value of one customer contract. It quietly dictates your entire go-to-market: a $500 ACV can't fund a salesperson; a $50,000 ACV can't be sold self-serve.
Agile
Building in short iterations with frequent feedback instead of one long plan. In practice, often a set of rituals performed by teams that still work to a fixed annual roadmap.
Aha moment
The instant a user genuinely gets why your product matters. Find it in the data, then redesign onboarding so people reach it sooner.
AI-first
Designing the product around AI as the core mechanic, not bolting a chatbot onto an existing app. The distinction matters: one changes the economics, the other changes the marketing.
Alpha
The earliest testable build, shown to a tiny trusted group. Expected to be broken; the point is direction, not polish.
Angel investor
An individual investing their own money, usually small cheques at the earliest stage. Decides fast, on instinct and relationships, with no committee to answer to — which cuts both ways.
Annualized run rate
Current period's revenue projected out over a year (e.g. this month × 12). Honest for stable subscriptions, misleading when your best month happened to include a one-off deal.
Anti-dilution
A clause protecting investors if you later raise at a lower valuation, by repricing their shares. Someone absorbs that protection — and it's the founders and employees.
API-first
Building the API as the primary product, with any UI layered on top. Makes you infrastructure rather than an app — different customers, different sales motion, different moat.
ARPA (Average Revenue per Account)
Total revenue divided by number of accounts. The B2B cousin of ARPU — an account may contain many users.
ARPU (Average Revenue per User)
Revenue divided by users. Useful in consumer, where the user and the payer are the same person.
ARR (Annual Recurring Revenue)
Predictable subscription revenue over a year — MRR × 12. The key word is recurring: one-off project fees and consulting aren't ARR, no matter how much founders wish they were.
ASP (Average Selling Price)
What a typical deal actually closes at, after discounts. Compare it to your list price to see how much of your pricing is fiction.
B
B2B
Selling to businesses. Fewer customers, bigger cheques, longer cycles, and a buyer who isn't the user.
B2B2C
Selling through a business to reach its consumers. You get distribution fast and lose the customer relationship — the partner owns it, and can take it back.
B2C
Selling to individuals. Many customers, small cheques, fast decisions, and brutal retention economics.
B2G
Selling to government. Enormous contracts, glacial procurement, heavy compliance. A real strategy, but not one a seed-stage runway usually survives.
Bad leaver
Someone leaving under circumstances that trigger penalty clauses — often forfeiting unvested and sometimes vested shares. Read the definition before you sign, not when you leave.
Beachhead market
The narrow first segment you dominate before expanding. Deliberately small: winning 80% of a tiny market beats 2% of a huge one, because the tiny market talks to itself.
Beta
A working-but-unfinished release given to real users. Alpha is "does it run"; beta is "does it hold up in the wild".
Blended CAC
Total acquisition spend divided by all new customers, including the ones who arrived organically. Always flatters you — it hides how much your paid channel really costs.
Blitzscaling
Prioritising speed over efficiency to win a winner-takes-all market. Rational in rare land-grab situations, catastrophic when applied to a market that isn't one.
Blue ocean strategy
Creating uncontested market space instead of fighting in a bloody one. Beautiful in theory; most "blue oceans" turn out to be empty because nobody wants to swim there.
Board observer
Attends board meetings, no vote. Common for smaller investors. Costs you nothing formally, but every observer is another person in the room with opinions.
Board of directors
The body that formally governs the company — and can fire the CEO. Board composition is the single most consequential term in a term sheet, and the one founders read last.
Bookings
What customers have committed to pay. Not revenue (earned) and not cash (received). Mixing the three up is the fastest way to lose credibility in a board meeting.
Bootstrapping
Growing on revenue instead of investment. Slower, and you keep the company. A legitimate strategy that venture culture quietly treats as failure — wrongly, for most businesses.
Bottom-up market sizing
Number of real customers × realistic price = market. The credible way to size an opportunity, and the opposite of "1% of a $50B market".
Brand moat
Defensibility from people preferring you for reasons they can't fully articulate. The slowest moat to build and the hardest to take away.
Break-even point
Revenue covers costs; burn is zero. Underrated in venture-land, because reaching it means nobody can dictate your next round's terms. The strongest position in a negotiation is not needing the money.
Bridge round
A top-up between proper rounds to reach the metrics the next one needs. Honest when it buys a clear milestone; a warning sign when it's the third in a row.
Burn multiple
Net burn ÷ net new ARR — dollars burned to add one dollar of recurring revenue. Under 1 is excellent, 1–2 fine, above 3 says growth is being bought rather than earned.
Burn rate
Cash lost per month. Gross burn is what you spend; net burn is spend minus earn. Net is the one that matters.
BDR (Business Development Representative)
Generates new pipeline through outbound — cold calls, emails, sequences. Similar to an SDR, usually focused on outbound rather than inbound leads.
Business model
How you create value, deliver it, and capture some of it as money. "We'll monetise later" is not a business model; it's a bet that you'll invent one before the cash runs out.
Business Model Canvas
A one-page template covering segments, value proposition, channels, revenue, costs and the rest. Good for forcing a conversation; not a substitute for talking to customers.
Buying committee
The group who collectively decide in an enterprise purchase: user, champion, economic buyer, security, legal, procurement. Any one of them can kill the deal; none of them can approve it alone.
C
CAC (Customer Acquisition Cost)
Everything spent to win one paying customer — ads, salaries, tools — divided by customers won. Founders love to leave the salaries out. Investors always put them back.
CAC payback period
Months until a customer has repaid their acquisition cost. Often more useful than LTV/CAC because it's about cash: a great five-year LTV doesn't help if you run out of money in eight months.
Cap table
The record of who owns what: founders, employees, investors, and everything convertible into shares. A messy cap table at seed is a real reason serious investors walk.
Capital efficiency
How much output you get per dollar raised. The metric that came back into fashion the moment cheap money disappeared.
Carried interest (carry)
The share of fund profits partners keep — classically 20%. It's why VCs chase outliers rather than steady returns: carry only pays when the fund makes real money.
Cash runway
Cash ÷ net burn = months until zero. Under six, fundraising gets very hard — investors can smell it and will wait. Start raising at twelve.
Category creation
Inventing a new market rather than competing in an existing one. Enormous upside, enormous cost: you pay to educate everyone, and your competitors inherit that education for free.
CEO (Chief Executive Officer)
Accountable for the whole company. At seed stage the real job description is: set direction, hire, raise money, and don't run out of cash.
CFO (Chief Financial Officer)
Owns the money: planning, reporting, fundraising support, controls. Most startups don't need one until Series B; a good finance lead earlier is usually enough.
Champion
The person inside the customer who wants you to win and sells you internally when you're not in the room. No champion, no enterprise deal.
Channel conflict
When your own sales team competes with your partners for the same customer. Poisons partnerships fast; needs rules of engagement before it happens, not after.
Channel fit
Whether a distribution channel actually suits your product and price point. Great products die in channels that can't carry them.
Channel partner
A third party who sells your product for a cut. Buys reach, costs margin and control.
Churn
The rate customers or revenue leave. Logo churn counts customers; revenue churn counts money. Losing ten tiny accounts and one huge one look identical in logo churn and nothing alike in reality.
Churned MRR
Recurring revenue lost to cancellations and downgrades in a period. The number that eats your growth quietly.
Clawback
A right to take back money already paid — commissions on a deal that churned, or carry on a fund that ended up underwater.
Cliff
The period at the start of vesting where you earn nothing — typically one year. Leave on day 364 and you get zero; on day 366 you have a year's worth.
Closed beta
An invite-only test. Lets you control the input, fix things quietly, and manufacture scarcity while you're at it.
Closing
The moment a deal legally completes and money moves. A term sheet is a promise; closing is the fact. Deals die between the two more often than founders expect.
CMO (Chief Marketing Officer)
Owns demand, positioning and brand. Hiring one before you know your ICP is a reliable way to burn a year and a salary.
CMRR (Committed Monthly Recurring Revenue)
MRR adjusted for signed changes you already know about — bookings landing, cancellations announced. A more honest forward view than raw MRR.
Co-founder
A partner in starting the company. The single highest-variance decision you'll make: co-founder conflict kills more startups than competitors do.
Cohort analysis
Grouping users by when they arrived and tracking each group over time. Separates "we're growing" from "we're leaking, but pouring in faster". Aggregate charts hide the leak; cohorts expose it.
Commit forecast
Deals a rep is willing to promise will close this period. Treated as near-certain — which is exactly why a missed commit destroys trust.
Competitive advantage
Why you win a deal today. Distinct from a moat, which is why you keep winning after everyone copies you.
Competitive landscape
Who else solves this problem, including spreadsheets, interns and doing nothing. "We have no competitors" reads as "we haven't looked".
Competitive moat
The structural reason a well-funded competitor can't just copy you: network effects, switching costs, data, brand, regulation, distribution.
Competitive positioning
The slot you occupy in a customer's head relative to alternatives. You don't get to skip it — if you don't choose, the market chooses for you.
CAGR (Compound Annual Growth Rate)
Smoothed average annual growth over several years. Flattering by design: it erases the year everything went sideways.
Concierge MVP
Delivering the service manually, openly, for a handful of users before automating. You learn what the software must do by being the software.
Conditions precedent
Things that must be true before an investment closes — clean cap table, signed IP assignments, key hires. Unglamorous, and where closings stall.
Conjoint analysis
A pricing/feature research method: force people to choose between bundles, infer what they actually value. Better than asking "would you pay for X?", which people answer politely and falsely.
Continuous discovery
Talking to customers every week as a habit, not as a project before a launch. The difference between steering and guessing.
CARR (Contracted Annual Recurring Revenue)
ARR including contracts signed but not yet live. Useful in enterprise; also a convenient place to inflate a number.
Contribution margin
Revenue minus all variable costs for one unit. What each additional sale actually contributes toward fixed costs and profit.
Conversion funnel
The narrowing path from first touch to paying customer. Its value is diagnostic: it shows you which step is bleeding.
Conversion rate
Share of people completing a step. Meaningless without naming the step and the population — "3% conversion" describes nothing on its own.
Convertible note
Like a SAFE but legally debt: it accrues interest and has a maturity date. Miss the date without raising and the investor can in theory demand repayment.
COO (Chief Operating Officer)
Runs execution so the CEO can run direction. The most loosely defined C-role: it means whatever the CEO is bad at.
CVC (Corporate Venture Capital)
A big company's investment arm. Brings distribution and domain access; brings strategic agendas and can scare off their competitors as customers.
COGS (Cost of Goods Sold)
Direct costs of delivering your product — hosting, support, payment fees. What separates revenue from gross profit, and what founders forget when they call themselves high-margin.
CPA (Cost per Acquisition)
Cost of one conversion in a specific channel. Narrower than CAC: it usually excludes salaries and overhead.
CPL (Cost per Lead)
Spend per lead generated. Cheap leads that never convert are the most expensive thing in marketing.
CPO (Chief Product Officer)
Owns what gets built and why. Early on, that person is the founder — and should stay the founder longer than most think.
CRO (Chief Revenue Officer)
Owns everything revenue-facing: sales, and often marketing and customer success. Hired to make growth a system rather than a set of heroic individuals.
Cross-sell
Selling an additional product to an existing customer. Cheaper than new acquisition, and one of the engines behind NRR above 100%.
CTO (Chief Technology Officer)
Owns technology and the engineering org. At seed this means writing code; at Series B it means almost none.
Customer acquisition
The whole process of turning a stranger into a paying customer. If it isn't repeatable, you don't have a business yet — you have a series of favours.
Customer concentration
How much revenue sits in your biggest customers. One client at 40% of revenue isn't a customer, it's an employer — and diligence will treat it that way.
Customer development
Steve Blank's discipline of testing your business hypotheses on real customers instead of perfecting the product in a room.
Customer discovery
Talking to potential users to learn whether the problem is real, before building. The trap is asking about your idea. Ask about their last week — behaviour is data, opinions are noise.
CES (Customer Effort Score)
How hard it was for the customer to get their thing done. Predicts loyalty better than satisfaction: people forgive dull, they don't forgive difficult.
CX (Customer Experience)
The sum of every interaction with your company, not just the product. Includes your billing emails, which are worse than you think.
CLV (Customer Lifetime Value)
Total gross profit one customer brings before leaving. Gross profit, not revenue — LTV computed on revenue is a vanity number.
Customer retention
Keeping the customers you won. The unglamorous half of growth, and the half that compounds.
Customer success
Proactively making sure customers get the outcome they bought. Not support: support waits for a ticket, success prevents one.
CSM (Customer Success Manager)
Owns a book of accounts: onboarding, adoption, renewal, expansion. In a healthy SaaS, they drive more revenue than they cost.
Customer validation
Proving people will actually pay — with money, not enthusiasm. The only validation that counts.
D
Dark launch
Releasing a feature to production invisibly, to test load and behaviour before anyone sees it.
DPA (Data Processing Agreement)
A contract governing how you handle a customer's personal data. Mandatory under GDPR, and a standard blocker in enterprise procurement.
Data room
The organised folder of documents investors review in diligence: cap table, contracts, financials, IP. Having it ready signals competence and shortens the deal.
DAU (Daily Active Users)
Unique users active per day. Only meaningful if daily use is natural for your product — nobody uses tax software daily, and that's fine.
DAU/MAU ratio
Stickiness: what share of monthly users show up on a given day. 20% is decent, 50%+ is a habit. Meaningless for products nobody should open daily.
DCF (Discounted Cash Flow)
Valuing a company on projected future cash discounted to today. Rigorous for mature businesses, theatre for a pre-revenue startup.
Deal flow
The stream of investment opportunities reaching a fund. The whole game for investors: better deal flow beats better judgement.
Deal memo
The internal write-up arguing for (or against) an investment. Worth writing your own about your company — it shows you exactly which parts are weak.
Deal sourcing
Actively finding startups to invest in rather than waiting for inbound. The unglamorous work that separates good funds from lucky ones.
Debt financing
Borrowing money and repaying it with interest. No dilution, but it must be repaid whether or not the plan worked.
Decision-maker
The person who can actually say yes. Not the person taking the meeting — those are frequently different people, and confusing them wastes quarters.
Deferred revenue
Cash you've collected for service not yet delivered. It's a liability, not a win — annual prepay is a loan from your customer.
Definition of Done (DoD)
The agreed bar a piece of work must clear to count as finished. Exists so "done" doesn't mean four different things across the team.
Demand generation
Creating awareness and desire so people come looking. Different from lead capture, which harvests demand that already exists.
Demand-side marketplace
The buyer half of a marketplace. Which side you build first is the central marketplace decision — and usually it's the harder one.
Demo day
The event where accelerator companies pitch investors. Useful as a deadline and a signal; rarely where the money actually gets committed.
Design partner
An early customer who co-builds the product with you, usually at a discount, in exchange for shaping it. Excellent — until you accidentally build custom software for one company.
Design sprint
A five-day process from problem to tested prototype. Good for breaking deadlock; not a replacement for continuous discovery.
Design thinking
A human-centred approach: empathise, define, ideate, prototype, test. Sound principles, frequently reduced to sticky notes.
Dilution
Your ownership percentage shrinking as new shares are issued. Unavoidable if you raise. The question isn't how to avoid it — it's whether the slice you give up buys a bigger pie.
Discount rate
In a SAFE or note: the discount early investors get on the next round's price. In finance: the rate used to value future money today.
Discovery call
The first real sales conversation — you learn their situation and qualify. If you spent it demoing, you skipped it.
Disintermediation
Marketplace users meeting through you and then transacting off-platform. The existential marketplace risk: you paid for the introduction and get nothing after it.
Double-trigger acceleration
Vesting accelerates only if two things happen: the company is acquired and you're let go. The founder-friendly standard, and the one acquirers accept.
Down round
Raising at a lower valuation than last time. Painful, dilutive, bad for morale — usually better than dying. The stigma is real but overrated.
Drag-along right
Lets a majority force minority shareholders to join a sale. Prevents a small holder blocking an exit — and means you can be dragged into a deal you dislike.
Dry powder
Committed money a fund hasn't deployed. A fund at the end of its life with no dry powder can love you and still not invest.
Dual-track agile
Running discovery and delivery in parallel: one track figures out what's worth building while the other builds what's already validated.
Due diligence (DD)
The deep check before money moves: legal, financial, technical, customer calls. Reaching DD means an investor stopped being polite and started being serious.
E
Early access
Letting a limited group in before general availability. Manages load and expectations, and makes the product feel worth queueing for.
Early adopter
Someone who buys unfinished products because the problem hurts enough. They tolerate bugs and tell you the truth. They are not representative of the mainstream, and mistaking them for it kills companies.
EBIT
Earnings before interest and taxes — operating profit.
EBITDA
Earnings before interest, taxes, depreciation and amortisation. A proxy for operating cash generation, and a place to hide real costs.
Economic buyer
The person whose budget it is. Your champion loves you; the economic buyer signs. You need both.
Economies of scale
Unit costs falling as volume rises. Real in hardware and logistics; often assumed and absent in software, where the expensive part is people.
Elevator pitch
Your company in thirty seconds. The test isn't whether it's short — it's whether the listener can repeat it accurately to someone else.
Embedded finance
Financial services delivered inside a non-financial product — lending, insurance, accounts. Monetises an audience you already own.
Embedded payments
Payments built natively into your product so money moves without leaving. Adds revenue per transaction and considerable compliance.
Embedded SaaS
Software living inside another company's product or workflow rather than standing alone.
Employee option pool
Shares reserved to hire and reward employees, typically 10–15%. The trick: investors usually require it created pre-money, so it dilutes founders, not them. Negotiable.
Enterprise customer
A large organisation. Big cheques, long cycles, security reviews, procurement, and a buying committee that can stall you for two quarters.
Enterprise sales
Selling to large organisations: multiple stakeholders, pilots, legal, procurement. A different sport from SMB sales, not a bigger version of it.
Equity
Ownership in the company. The currency you pay with when you have no cash — and the only one you can't get back.
Equity financing
Raising money by selling ownership. No repayment obligation; permanent dilution.
ESOP (Employee Stock Option Plan)
The formal scheme granting employees options. Explain it properly to your team — an unexplained ESOP motivates nobody.
Exercise price (strike price)
The fixed price at which an option holder can buy shares, set at grant. The gap between it and real value is the employee's upside.
Exit
The event where shares turn into money: acquisition, IPO or secondary. The whole venture structure is built around it — decide early whether you actually want one.
Exit strategy
Your plan for how investors eventually get paid. Investors ask; the honest answer at seed is a thesis about who buys companies like yours and why.
Expansion MRR
Additional recurring revenue from existing customers — upgrades, seats, cross-sells. The cheapest revenue you'll ever get.
F
Fake door test
Advertising a feature that doesn't exist and measuring who clicks. Cheap demand evidence — just tell people honestly when they arrive, or you're buying data with goodwill.
FCF (Free Cash Flow)
Cash left after operating costs and capital spending. The number that decides whether you're actually independent.
Feature creep
Endless additions that bloat the product and blur its purpose. Usually the accumulated residue of saying yes to sales.
Flat round
Raising at the same valuation as last time. Not a triumph, not a disaster — often just an honest market.
Flywheel
A loop where each turn makes the next easier: more users → more data → better product → more users. Unlike a funnel, it compounds.
Follow-on investment
An existing investor putting more into a later round. Their absence is a loud signal to new investors.
Follow-on round
Any subsequent round after the first. Each one is judged on whether you did what you said you'd do with the last one.
Founder
Someone who started the company. A title with no fixed definition and enormous consequences — which is why it belongs in a written agreement.
Founder vesting
Founders vesting their own shares, usually via reverse vesting. Feels insulting when first proposed. It isn't — it's what saves the company when a co-founder quits in year one holding a third of it.
Founder-market fit
Whether you are the right person for this market: unfair insight, network, credibility, or the stamina to stay a decade. At pre-seed, investors weigh it heavily — there's little else to weigh.
Founders' agreement
The document defining equity, roles, vesting and what happens when someone leaves. Write it while everyone still likes each other.
Free trial conversion
Share of trials that become paid. If it's low, the problem is usually onboarding, not price.
Freedom to operate (FTO)
Whether you can ship without infringing someone's patent. Matters in deep tech, biotech and hardware; rarely in ordinary SaaS.
Freemium
A free tier converting a fraction to paid. Marketing, not charity. Only works if the free tier is genuinely useful and has a ceiling people hit when they succeed.
Freemium conversion
Share of free users who pay — often 2–5%. Which means freemium only works at volume, or with a very high ACV on the paid side.
Full ratchet
The harshest anti-dilution: earlier investors get repriced all the way down to the new lower price. Brutal for founders. Push for weighted-average instead.
Fully diluted
Ownership as if every option, SAFE and convertible had already become shares. The honest number. When someone quotes your ownership, ask whether it's fully diluted — it usually isn't, and it usually flatters you.
Fundraising
Selling equity for cash. A full-time job for roughly three months that you must do while also running the company.
G
Gabor-Granger method
A pricing technique: ask willingness to buy at descending prices to map a demand curve. Better than guessing, worse than watching people actually pay.
GDPR
EU data protection regulation. Applies if you touch EU residents' data regardless of where you're based. Fines are real; enterprise buyers will ask.
General partner (GP)
A partner running a fund and making investment decisions. When a VC says "I need to check with my partners", that's the GP layer.
Go-to-market (GTM)
The whole machine getting your product to customers: who you target, how you reach them, how you sell, at what price. Great products with no GTM lose to mediocre products with a good one, constantly.
Go-to-market fit
When you've found a repeatable channel that reliably produces customers at acceptable cost. The step after PMF that everyone forgets exists.
Go-to-market motion
The specific mechanics of how you sell — self-serve, inside sales, field sales, partner-led. Your ACV mostly decides it for you.
Good leaver
Someone leaving on terms that let them keep vested equity. The opposite of a bad leaver, and worth defining precisely in advance.
Gross margin
Revenue minus direct delivery costs, as a percentage. Software should sit at 70–85%. At 40% while calling yourself SaaS, you have a services business with a login screen — and it'll be valued like one.
GMV (Gross Merchandise Value)
Total value of goods transacted through a marketplace. Not your revenue — your revenue is the take rate on it. Founders quote GMV precisely because it's the bigger number.
Gross profit
Revenue minus COGS. The money that actually exists to fund everything else.
GRR (Gross Revenue Retention)
Revenue kept from existing customers excluding expansion. Caps at 100%. Where NRR flatters, GRR tells you the truth about churn.
Growth hacking
Creative, cheap, experiment-driven growth tactics. Largely a phase of internet history; the durable part is just running experiments seriously.
Growth loop
A cycle where the output becomes the input: users create content, content attracts users. Funnels need constant refilling; loops turn themselves.
Growth marketing
Marketing run as a measured experiment system across the whole funnel, not just the top.
Guardrail metric
A metric you watch to make sure optimising your main one isn't breaking something else — pushing signups while quietly destroying retention.
H
Hard cap
The absolute maximum you'll accept in a round. Prevents a round drifting bigger and diluting you more than you planned.
Hockey-stick growth
Flat then sharply exponential. Real occasionally, drawn on slides constantly. Investors read the shape as a claim about a loop — if you can't name the loop, they don't believe the curve.
Horizontal SaaS
Software for one function across all industries (Slack, Notion). Huge TAM, brutal competition, generic positioning.
I
ICE scoring
Prioritising by Impact × Confidence × Ease. Crude, fast, and better than whoever argued loudest.
ICP (Ideal Customer Profile)
A precise description of who you serve best — not "SMBs", but the segment where you win fast and repeatedly. A vague ICP is the root cause of most bad sales and marketing numbers.
Inbound marketing
Attracting people with content and search so they come to you. Slow to start, compounds, and doesn't stop when you stop paying.
Inbound sales
Selling to people who raised their hand. Higher conversion, less control over volume.
Incubator
Hosts and supports very early companies with space, mentorship and sometimes money — looser than an accelerator and without a fixed clock.
Indemnification
A promise to cover someone else's losses if something goes wrong. Buried in contracts, and occasionally unlimited — read the cap.
IPO (Initial Public Offering)
Selling shares to the public for the first time. The famous exit; the rare one. Most companies exit via M&A.
Intellectual property (IP)
What you own that's intangible: code, brand, patents, trade secrets. If it isn't formally assigned to the company, diligence will find out and the round will stop.
IRR (Internal Rate of Return)
Annualised return on an investment. How LPs judge funds — and why time-to-exit matters as much as multiple.
Invention assignment agreement
Contract making sure work created by founders and employees belongs to the company, not the person. Missing ones are a classic diligence landmine.
Investment committee
The group inside a fund who approve deals. Your champion partner has to sell you to them — so give them the ammunition.
Investment memo
The written case for an investment. Writing your own is the fastest way to find the holes in your story.
Investment thesis
A fund's stated view on where value will be created — stage, sector, geography, worldview. Pitching outside it isn't persuasion, it's noise.
J
Job story
"When [situation], I want to [motivation], so I can [outcome]." A user story that keeps the context instead of inventing a persona.
Jobs-to-be-Done (JTBD)
People don't buy products, they hire them to do a job. Reframing this way reveals your real competitor — often a spreadsheet, an intern, or doing nothing.
K
Kano model
Sorts features into basics (absence angers), performance (more is better) and delighters. Explains why nailing the boring stuff beats a clever feature nobody asked for.
KPI (Key Performance Indicator)
A metric you've decided to steer by. Having twenty means having none.
Key result (KR)
The measurable outcome proving an objective was met. If it isn't a number with a date, it's a wish.
L
Land and expand
Get in small with one team, prove value, grow across the company. The engine behind NRR above 100% — but only if the small landing delivers something people notice.
Lead generation
Producing people who might buy. Easy to do badly: volume without qualification just gives your sales team a worse job.
Lead investor
Sets the terms, does the heavy diligence, writes the biggest cheque. Others follow. Finding a lead is 80% of the work of a round.
Lead scoring
Ranking leads by likelihood to buy so sales works the good ones first. Useful once you have enough data to be right; guesswork before.
Leading indicator
A metric that moves before the outcome does — demos booked before revenue. Lagging indicators tell you what happened; leading ones let you act.
Lean Canvas
A one-page plan built around problem, solution, metrics and unfair advantage. The startup-flavoured answer to the Business Model Canvas.
Lean startup
Build–measure–learn with the smallest possible experiments. Widely quoted, rarely practised: most teams build a lot and measure little.
LOI (Letter of Intent)
A non-binding statement of intent to buy or invest. Worth roughly the paper it's on — treat it as interest, not traction.
Limited partner (LP)
An investor in a fund — pensions, family offices, wealthy individuals. They set the clock the whole venture industry runs on.
Liquidation preference
Who gets paid first when the company is sold, and how much. "1× non-participating" means the investor takes their money back or converts — whichever is better for them. Anything more aggressive means founders can walk away with nearly nothing while the headline price looks fine.
Liquidation stack
The order in which everyone gets paid at exit. Later investors usually sit on top; common shareholders — you — are at the bottom.
Liquidity event
Anything turning shares into cash: acquisition, IPO, secondary sale.
Lock-in
Customers staying because leaving is painful rather than because they're happy. Works until a competitor makes migration free.
Logo churn
Share of customers lost, regardless of size. Hides the difference between losing ten small accounts and one giant one.
Logo retention
Share of customers kept. The mirror of logo churn.
Low-code
Building software with minimal hand-written code. Fast to start; the ceiling arrives sooner than promised.
LTV (Lifetime Value)
Total gross profit one customer brings before leaving. Gross profit, not revenue — LTV on revenue is a vanity number.
LTV/CAC ratio
How many times over a customer repays what it cost to get them. Below 1 you're paying people to use your product. 3× is the usual healthy target. Above 5× you're probably underinvesting in growth.
M
M&A (Mergers and Acquisitions)
Buying and combining companies. The overwhelmingly common exit — plan for it, not the IPO.
Market penetration
Share of your addressable market you've actually captured. Grounds a TAM slide in reality.
Market sizing
Estimating how big the opportunity is. Investors don't believe your number — they read it to see how you think.
Marketplace
A platform matching buyers and sellers, monetising via take rate. Hard: you must solve the chicken-and-egg problem before anything else works.
Marketplace liquidity
The likelihood a listing sells or a buyer finds a match, quickly. The only marketplace metric that matters — GMV without liquidity is a coincidence.
Marketplace take rate
The cut you keep from each transaction. Too high and both sides route around you; too low and you never cover CAC.
MAC (Material Adverse Change)
A clause letting a party walk if something significantly bad happens before closing. The escape hatch nobody thinks about until it's used.
MAU (Monthly Active Users)
Unique users active in a month. Define "active" honestly, or the number means nothing.
Micro-SaaS
A small, focused, often solo-run software business. Not venture-scale by design — and frequently a better life than one that is.
Mid-market
Companies between SMB and enterprise. Often the sweet spot: real budgets, without a two-quarter procurement process.
MLP (Minimum Lovable Product)
The smallest product people actually enjoy, not merely tolerate. A reaction to MVPs that shipped something technically working and emotionally dead.
MMP (Minimum Marketable Product)
The smallest version you can actually sell, as opposed to merely test.
MVP (Minimum Viable Product)
The smallest thing that tests your riskiest assumption. Not "version one with fewer features" — a test. Most MVPs fail because founders build a small product instead of designing an experiment.
Moat
The structural reason a well-funded competitor can't just copy you. "We execute faster" is not a moat — it's a head start with an expiry date.
Monetization
How you turn usage into money. Deferring it is a strategy, not an accident — know which one you're doing.
MoSCoW prioritization
Must / Should / Could / Won't have. Its real value is the "Won't", which is the only part that creates focus.
MFN (Most-Favored Nation)
A clause giving an investor automatically the best terms you grant anyone later. Stack a few and you lose all flexibility to negotiate.
MQL (Marketing-Qualified Lead)
Someone marketing thinks is worth sales' time — usually because they downloaded something. Frequently a fiction that keeps two departments arguing.
MRR (Monthly Recurring Revenue)
Predictable subscription revenue per month. The heartbeat of a SaaS business.
Multi-sided marketplace
A platform serving three or more distinct groups. Each additional side multiplies the chicken-and-egg problem rather than adding to it.
N
NDA (Non-Disclosure Agreement)
A confidentiality contract. Normal with customers and partners; asking a VC to sign one before a pitch marks you as new.
NPS (Net Promoter Score)
"How likely are you to recommend us?" on 0–10, promoters minus detractors. Popular, blunt, and easy to game. The free-text answer is worth more than the score.
NRR (Net Revenue Retention)
Revenue from the same cohort a year later, including upgrades minus churn. Above 100% means existing customers grow you with zero new sales. After PMF, the single most telling SaaS number.
Network effects
Each new user makes the product more valuable to everyone else. The strongest moat there is, and the rarest. Most products claiming network effects just have customers.
No-code
Building software with no code at all. Genuinely enough to validate almost any idea — and most founders skip it to write code they later throw away.
Non-participating preferred
Investor takes their preference or converts to common — not both. The founder-friendly standard. Insist on it.
North Star Metric (NSM)
The one number capturing the value customers actually get — not revenue, but the thing that causes it. Pick it badly and the whole company aims at the wrong target.
NPV (Net Present Value)
Future cash flows discounted to today's money. Sound finance, largely theatre when applied to a pre-revenue startup.
O
OKR (Objectives and Key Results)
An objective plus measurable key results. Works when there are few and they're honest; becomes theatre when every team has six and grades itself.
Open beta
A public test anyone can join. Real load, real feedback, real reputational exposure.
OPEX (Operating Expenses)
The cost of running the business — salaries, rent, tools. Everything not directly in COGS.
Opportunity sizing
Estimating what a specific bet is worth before committing engineering to it. The cheapest way to avoid a wasted quarter.
Opportunity Solution Tree
A map connecting a desired outcome to opportunities to solutions to experiments. Keeps discovery honest about why you're building this.
Option pool
Equity reserved for employees. Watch when it's created: pre-money means it dilutes you, post-money means it dilutes everyone.
Organic growth
Growth without paid acquisition — word of mouth, search, referrals. Slower, cheaper, and it doesn't stop when the budget does.
Outbound marketing
Pushing your message to people who didn't ask. Buys speed and control; costs money continuously.
Outbound sales
Approaching prospects cold. Predictable and scalable once it works — and the fastest way to learn your ICP is wrong.
Ownership dilution
Your stake shrinking over successive rounds. Model it to exit before you raise, not after.
Ownership target
The stake a fund needs to make its maths work — often 15–20%. It explains why they push a round size that looks bigger than you need.
P
P&L (Profit and Loss)
The statement showing revenue, costs and what's left. Profit is an opinion; cash is a fact — watch both.
Paid growth
Growth bought with advertising. Instant, controllable, and it stops the day you stop paying.
Participating preferred
Investor gets their money back and shares in the rest — "double dipping". Meaningfully worse for founders than non-participating. Push back.
Patentability
Whether your invention can be patented — novel, non-obvious, useful. Rarely relevant to SaaS, central to deep tech.
Pay-as-you-go
Pay for what you use, no commitment. Low friction to start, unpredictable revenue for you.
Pay-to-play
Existing investors must join the new round or lose preferential rights. Brutal, and occasionally exactly what a cap table needs in a down round.
Payback period
Time until an investment repays itself. In growth, months until a customer covers their CAC.
Pipeline coverage
Pipeline value ÷ quota. 3× is the common rule of thumb: assume most deals won't close, because they won't.
Pirate metrics
Acquisition, Activation, Retention, Referral, Revenue — AARRR. A map for finding where you leak.
Pitch
The story you tell to get money. The best ones are a narrative with evidence, not a features tour.
Pitch deck
The slides. Its only job is to earn the next meeting — not to answer everything.
Pivot
Changing direction while keeping what you learned. A real pivot is based on evidence. "We pivoted" said three times in a year usually means guessing, rebranded as strategy.
PaaS (Platform as a Service)
Infrastructure and tooling others build on top of, sold as a service.
Platform business model
Creating value by connecting groups rather than producing the thing yourself. Enormous leverage; you own the rails, not the cargo.
PLG motion
The specific mechanics of product-led growth: self-serve signup, in-product upgrade prompts, usage-based expansion.
Portfolio company
A company a fund has invested in. You become one — and one of thirty, which explains the response times.
Portfolio construction
How a fund plans its bets: how many, what size, how much reserved for follow-ons. It dictates whether they can invest in you at all.
Post-money valuation
Company value after the new money lands: pre-money + investment. Always clarify which one is being quoted.
Power law
In a venture portfolio, one company returns more than everything else combined. This one fact explains almost all investor behaviour: why they pass on solid-but-small businesses, why they push growth, why "safe" is a dirty word.
Pre-money valuation
Company value before the new money. Your ownership maths starts here.
Pre-seed round
The first outside money, raised on a team and a thesis rather than numbers. You're selling a plausible future, not traction.
Pricing power
Ability to raise prices without losing customers. The purest evidence of a moat — and the fastest margin improvement available.
Pricing strategy
How you decide what to charge and why. The most under-tested lever in most startups: a 10% price rise beats a 10% conversion rise every time.
Principal
A mid-level investor at a fund — sources and works deals, usually can't unilaterally write the cheque. Know who in the room can actually say yes.
Pro rata allocation
The slice of a new round reserved for an existing investor to maintain their stake.
Pro rata right
An investor's right to buy into your next round to keep their percentage. Standard and reasonable — but it eats allocation you may want to give a better investor later.
Problem validation
Proving the problem is real and painful before you build. The step whose absence explains most well-built, unwanted products.
Problem-solution fit
Evidence the problem is real and your approach plausibly solves it. Comes before PMF and gets skipped constantly.
Procurement cycle
The formal buying process in a big company: security, legal, vendor onboarding. Can add months after the customer has already said yes.
Product analytics
Measuring what people actually do in your product. The antidote to opinions, including yours.
Product cannibalization
A new product eating an existing one's revenue. Sometimes a failure; sometimes just doing it to yourself before a competitor does.
Product discovery
Deciding what's worth building through evidence rather than argument.
Product marketing
Positioning, messaging, launches — connecting what you built to why anyone should care. The most underrated hire in B2B.
Product operations (Product Ops)
The plumbing behind product teams: data, tooling, feedback loops, process. Only needed once you have several product teams.
PRD (Product Requirements Document)
What you're building and why, written down. Useful as a thinking tool; harmful when it becomes a contract nobody rereads.
Product roadmap
The plan for what's coming. Best held as a set of intentions with confidence levels — not a set of promises with dates.
Product-led growth (PLG)
The product does the acquiring, converting and expanding — users get value without talking to anyone. Works when time-to-value is minutes. Doesn't work when your buyer is a procurement committee.
Product-led sales (PLS)
Self-serve usage generates signals, then humans step in on the accounts worth it. The hybrid most B2B SaaS eventually lands on.
Product-market fit (PMF)
When the market starts pulling the product out of you: usage grows without pushing, retention flattens, sales stop feeling like persuasion. You don't debate whether you have it — you notice you're drowning in demand.
PQL (Product-Qualified Lead)
Someone already using the product and hitting limits. Converts best of any lead type — they've already proven it works for them.
PoC (Proof of Concept)
Proves the thing can be built. Doesn't prove anyone wants it or will pay — different questions, routinely confused.
PoV (Proof of Value)
A time-boxed enterprise pilot proving business value with real data. Define the success criteria in writing beforehand, or it never ends.
Prosumer
A power user between consumer and professional — pays personally, demands professional capability. An excellent, underserved wedge.
Prototype
A rough, often non-functional version used to test whether an idea feels right. Cheap to throw away, which is the point.
Q
QoQ (Quarter-over-Quarter growth)
Growth vs the previous quarter. Smooths monthly noise without hiding a bad year the way annual figures do.
R
R&D (Research and Development)
Work on new products and capabilities. In many countries it carries tax credits worth real money — check.
Reactivation
Winning back users who drifted away. Cheaper than new acquisition — they already know what you do.
Recapitalization
Restructuring the cap table, often wiping out or heavily diluting existing holders. The financial equivalent of surgery: only when the alternative is worse.
Referral loop
Users bringing users as a natural by-product of use. A growth loop, not a campaign.
Referral program
Explicitly rewarding users for bringing others. Works when the product is already loved; a bribe cannot manufacture that.
Representations and warranties
Formal statements of fact you make in a deal — the cap table is accurate, you own your IP. Getting them wrong has personal consequences.
RFP (Request for Proposal)
A formal document asking vendors to bid. Often written around an incumbent — if you didn't help shape it, you're probably the price comparison.
Reseller
A partner buying your product to sell on. Reach in exchange for margin and distance from your customer.
Reserve ratio
How much of a fund is held back for follow-ons rather than first cheques. Determines whether your existing investor can support you later.
RSU (Restricted Stock Unit)
A promise of shares on vesting — no purchase needed, unlike an option. Common at big companies, rarer in early startups.
Resurrection rate
Share of churned users who come back. A quietly important number nobody tracks.
Retention curve
Percentage of a cohort still active over time. The question is whether it flattens. Flat at 40% is a business; sliding to zero is a leaky bucket, whatever the growth chart says.
ROAS (Return on Ad Spend)
Revenue per unit of ad spend. Channel-level, and blind to whether those customers stay.
ROA (Return on Assets)
Profit relative to assets. Rarely used in software, where the assets walk out at 6pm.
ROE (Return on Equity)
Profit relative to shareholder equity.
ROIC (Return on Invested Capital)
How efficiently invested money produces profit. The mature-business cousin of capital efficiency.
ROI (Return on Investment)
Gain relative to cost. Vague unless you say over what period and counting what.
Revenue churn
Recurring revenue lost in a period. Can be negative — in a good way — when expansion outruns losses.
Revenue concentration
How much revenue sits with few customers. High concentration is a valuation discount and a diligence flag.
Revenue multiple
Valuation ÷ revenue (usually ARR). The shorthand for how SaaS gets valued — and it swings wildly with the market's mood, not your performance.
RevOps (Revenue Operations)
Unifying the systems and data behind marketing, sales and success. Boring, and the reason forecasts stop being fiction.
Revenue recognition
Accounting rules for when revenue counts as earned. An annual prepay isn't twelve months of revenue today, however nice the bank balance looks.
Revenue-based financing
Capital repaid as a share of revenue. Non-dilutive; expensive; only sane with predictable revenue.
Reverse vesting
You already own the shares, but the company can buy back the unvested part if you leave. The usual mechanism for founder vesting.
RICE scoring
Reach × Impact × Confidence ÷ Effort. More rigorous than ICE, still an opinion wearing a number's clothes.
ROFO (Right of First Offer)
You must offer shares to a specific holder before selling elsewhere.
ROFR (Right of First Refusal)
A holder can match any offer you receive. Chills secondary sales — buyers dislike bidding to be outbid.
RAT (Riskiest Assumption Test)
Test the assumption that kills you if wrong — before building anything. Often a better first move than an MVP.
Rule of 40
Growth rate % + profit margin % should exceed 40. Grow 80% and burn 30%? Fine. Grow 15% and burn 40%? Not fine.
Run rate
Current performance extrapolated over a year. Honest for steady subscriptions, misleading when the base period was unusual.
Runway
Months of cash left at current burn. Under six, fundraising gets very hard — investors can smell it and will wait. Start raising at twelve.
S
SaaS (Software as a Service)
Software sold as an ongoing subscription rather than a one-off licence. The default model — and a set of expectations about margin and retention you'll be measured against.
SaaS magic number
New ARR ÷ prior period's sales & marketing spend. Above 0.75 means spending more is justified; below 0.5 means fix the machine before feeding it.
SAFE (Simple Agreement for Future Equity)
Money now, shares later. Converts at your next priced round, usually with a discount or valuation cap. No interest, no maturity, no valuation argument today.
Sales cycle
Time from first contact to signed contract. Sets your cash planning: a nine-month enterprise cycle means money closed today was worked for last autumn.
SDR (Sales Development Representative)
Qualifies leads and books meetings for AEs. The entry role in a sales org, and the one with the worst day.
Sales efficiency
Revenue produced per dollar of sales spend. The number that decides whether hiring more reps helps or just costs more.
Sales enablement
Giving sales the content, training and tools to sell. In practice: making sure reps can answer the question that kills deals.
Sales funnel
Stages from lead to close. Its purpose is diagnosis — showing which stage leaks.
Sales operations (Sales Ops)
The infrastructure of selling: CRM, territories, quotas, forecasting.
Sales velocity
(Opportunities × deal value × win rate) ÷ cycle length. One number combining every lever you have.
Sales-assisted PLG
Self-serve by default, humans on the accounts worth a conversation. How most successful PLG companies actually operate.
Sales-led growth (SLG)
Humans sell the product: demos, pilots, negotiation. Necessary above a certain ACV — the only way to sell things needing a champion inside the buyer.
SQL (Sales-Qualified Lead)
A lead sales has accepted as worth working. The handoff point where marketing and sales usually start arguing.
SAM (Serviceable Available Market)
The slice of TAM you could realistically reach with your model and geography.
Scalability
Ability to grow revenue much faster than costs. If serving twice the customers needs twice the people, you have an agency.
Scale-up
A startup past PMF, now growing fast. Different job entirely: the problem shifts from discovery to systems and hiring.
Scrum
An agile framework with sprints, standups, retros and defined roles. Fine; frequently cargo-culted.
Secondary sale
Selling existing shares to another buyer rather than issuing new ones. Lets founders take some money off the table without an exit.
Secondary transaction
Any trade of existing shares between parties. Increasingly normal at later stages; usually needs board and ROFR clearance.
Seed round
Money to find product-market fit. You're expected to show something — early users, a product, a signal. Seed money buys time to prove the thing works.
Self-serve
Customers buy and onboard with no human involved. Only viable when time-to-value is short and the price needs no approval.
SLA (Service-Level Agreement)
A contractual promise about uptime or response time, usually with penalties. Enterprise will ask. Don't promise what you can't measure.
SOM (Serviceable Obtainable Market)
What you can realistically win in the near term, given competition and capacity. The only one of TAM/SAM/SOM that constrains next year's plan.
Side letter
A separate agreement giving one investor extra rights not in the main documents. Fine occasionally; a mess once several exist and contradict each other.
Single-trigger acceleration
Vesting accelerates on acquisition alone. Acquirers dislike it — it can vest the team they're buying. Double-trigger is the norm for a reason.
SMB (Small and Medium-sized Business)
Small companies. Fast decisions, small cheques, high churn. Volume is the only way the maths works.
Smoke test
Testing demand before building — a landing page, an ad, a waitlist. Cheapest evidence available, and still routinely skipped.
Soft launch
Releasing quietly to a limited audience or market to learn before the real launch.
Solution validation
Confirming your specific solution actually solves the validated problem. The step between problem validation and building.
SPV (Special Purpose Vehicle)
An entity created to pool investors into a single deal. Keeps your cap table to one line instead of forty.
Sprint
A fixed work interval, usually 1–2 weeks, ending in something shippable.
Startup accelerator
A fixed-length programme taking existing teams through structured support, usually for a small equity stake, ending in demo day. It sharpens a company that already exists.
Startup studio
See venture studio: builds companies internally from its own ideas and teams.
Stickiness
How embedded the product is in someone's routine. Often measured DAU/MAU. Sticky beats exciting over a decade.
Stock option
The right to buy shares later at a fixed price. If the company grows, the gap between that price and real value is the employee's upside.
Strategic investor
A corporate investing for strategic reasons as well as returns. Brings distribution; brings an agenda, and can make their competitors un-sellable to.
Subscription business model
Recurring payment for ongoing access. Predictable revenue, in exchange for having to earn the renewal forever.
Sunk cost
Money and time already spent and unrecoverable. Irrelevant to what you should do next — and the reason dead projects survive another quarter.
Switching cost
The pain of leaving you: migrating data, retraining, rebuilding integrations. Quiet, unglamorous, and often the real reason boring B2B software has 95% retention.
T
Tag-along right
Lets minority holders join a sale on the same terms as a major one. Protection against being left behind in someone else's exit.
Take rate
The cut a platform keeps from each transaction. Your actual revenue in a marketplace — not GMV.
TAM (Total Addressable Market)
Total demand if you had 100% of the market. A thought experiment, not a plan. Investors read it to see how you think.
Technical debt
Future cost of today's shortcuts. Like real debt, sometimes worth taking deliberately — and dangerous when nobody's tracking the balance.
Tender offer
An organised opportunity for employees and early holders to sell some shares, usually alongside a round. How people get liquidity before an exit.
Term sheet
A short, mostly non-binding summary of the deal: how much, at what valuation, with what rights. Non-binding legally, very binding socially.
TTFV (Time to First Value)
How long before a new user gets something useful. The number that decides whether self-serve can work for you at all.
TTM (Time to Market)
Idea to launch. Speed matters, but shipping the wrong thing quickly isn't an advantage.
TTV (Time to Value)
How long until the customer gets the outcome they bought. Shorten it and churn, CAC payback and NPS all improve at once.
Top-down market sizing
Starting from a huge industry number and taking a percentage. Fast, lazy, and instantly recognisable to anyone who's seen a hundred decks.
TCV (Total Contract Value)
Everything a contract is worth over its whole term. Bigger than ACV, and quoted precisely for that reason.
TCO (Total Cost of Ownership)
Everything the customer pays to use you: licence, implementation, training, maintenance. Enterprise buyers compute this; your price is only part of it.
Traction
Evidence the market wants this: revenue, retention, growth, usage. Not registrations, not LOIs, not "interest". The only argument that works when everything else is contested.
Trade secret
Valuable information protected by keeping it secret rather than registering it. No expiry, no protection once it leaks.
Trial-to-paid conversion
Share of trials that become paying customers. Low numbers usually mean people never reached first value, not that you're expensive.
U
Unicorn
A private company valued above $1B. Once rare enough to deserve the name. It measures valuation, not health — plenty of unicorns have never made a profit and never will.
USP (Unique Selling Proposition)
The one thing you offer that competitors don't. If it can be copied in a sprint, it's a feature, not a USP.
UVP (Unique Value Proposition)
The distinct value you deliver, in the customer's language — not your feature list translated into adjectives.
Unit economics
Whether one customer makes or loses you money once you strip out the fundraising and the hope. If the unit doesn't work, scale makes it worse.
Upsell
Selling a bigger version to an existing customer. Cheap revenue; a driver of NRR above 100%.
Usage-based pricing
Pay for what you consume. Aligns price with value and makes revenue harder to forecast — you're now exposed to your customers' volumes.
User acquisition
Getting new users. Distinct from customer acquisition wherever users don't pay.
User activation
Getting a new user to their first real value. Usually the highest-leverage funnel step available.
User engagement
How much and how meaningfully people use the product. Easy to measure badly — time spent is not automatically good.
User journey
The full path from first hearing about you to becoming a regular. Mapping it reveals the gaps you've been explaining away.
User research
Systematically learning about users' behaviour and needs. Not a survey. Not asking whether they like your idea.
V
Valuation cap
The maximum valuation at which a SAFE converts. Raise higher and the early investor still converts at the cap — their reward for showing up early. Lower cap = more dilution for you.
Van Westendorp pricing
Four questions mapping the price range people find acceptable (too cheap, cheap, expensive, too expensive). A starting point, not an answer.
Vanity metric
A number that reliably goes up and means nothing: registrations, downloads, page views, "community members". Test: if it doubled tomorrow, would you change a single decision? If not, it's vanity.
Venture capital (VC)
A fund investing other people's money into high-risk, high-upside companies. They don't need you profitable — they need you enormous. If yours is a good $10M business, VC is the wrong fuel.
Venture debt
Loans for venture-backed startups, usually alongside equity. Less dilutive, comes with covenants and a repayment schedule that doesn't care about your quarter.
Venture fund
The pooled vehicle a VC invests from, with a fixed life — typically ten years. That clock explains almost every deadline they impose on you.
Venture studio
An organisation building startups internally rather than investing in outside ones: its own ideas, its own teams, a large stake. Capital-intensive and slow to learn — which is exactly why I think the model is about to change.
Vertical SaaS
Software for one industry (dentists, logistics, construction). Smaller TAM, far less competition, deeper moats — and customers who can actually be found.
Vesting
Earning shares over time rather than owning them immediately. Standard is four years. It protects the company from someone leaving in month five with a quarter of it.
Viral coefficient (k-factor)
New users brought by each existing user. Above 1 means growth without spending. Almost nothing sustains k > 1 for long — treat any plan depending on it as a wish.
Viral loop
The cycle where using the product exposes new people to it. Built in, not bolted on.
Virality
Spread through users themselves. A property of the product's mechanics, not of a campaign — you can't "add virality" later.
W
Waitlist
Collecting interested people before launch. Demand evidence and scarcity in one — but a waitlist signup is the cheapest promise a person can make.
Warrant
A right to buy shares at a set price later, often attached to venture debt as a sweetener.
WACC (Weighted Average Cost of Capital)
Blended cost of a company's debt and equity. Corporate finance; nearly irrelevant to an early startup.
Weighted-average anti-dilution
The fairer anti-dilution: repricing accounts for how much was raised at the lower price. Always prefer this over full ratchet.
WTP (Willingness to Pay)
What a customer would actually hand over. Discoverable only by asking for money — stated intentions are famously generous.
Win rate
Share of qualified opportunities you close. A falling win rate usually means your ICP has drifted, not that reps got worse.
Winner-takes-all
A market where one player captures nearly everything, usually via network effects. Rarer than pitch decks claim — and the only case where blitzscaling is rational.
Wizard of Oz MVP
The product looks automated; humans do the work behind the curtain. Tests demand for the outcome without building the machine.
Y
YoY (Year-over-Year growth)
Growth vs the same period last year. Strips out seasonality — which is why it's the honest comparison for anything cyclical.
Z
Zero-to-one
Peter Thiel's term for creating something genuinely new, versus copying what works (one-to-n). Most startups claim zero-to-one and are doing one-to-n — which is fine, as long as you know which one you're doing.