The annualized value of your recurring subscription revenue. A key SaaS metric for predictable revenue.

The rate at which your company spends cash each month. Negative burn (positive cash flow) means you're profitable.

The total cost to acquire a new customer, including marketing, sales, and related expenses.

The smoothed annual growth rate between two points in time. Useful for comparing growth across different time periods.

Money spent on physical assets like computers, equipment, or office improvements. These are depreciated over time.

Cash added to a company by its founders or existing shareholders without issuing new equity or taking on debt. Simply increases the cash balance. Common in early stages or as bridge funding between rounds.

The direct costs attributable to producing your product or delivering your service. These costs scale with your revenue.

Standard shares held by founders and employees. Carries voting rights but is last in line during a liquidation event after preferred stockholders are paid.

Instruments (SAFEs or convertible notes) that convert into equity at a future priced round. The conversion price is determined by a valuation cap and/or discount negotiated at the time of investment.

A short-term loan that converts into equity at a future priced round. Includes an interest rate, and typically a valuation cap and/or discount that reward the early risk taken by the investor.

Non-cash expenses that spread the cost of assets over their useful life. Depreciation is for physical assets; amortization is for intangible assets.

The reduction in ownership percentage that existing shareholders experience when new shares are issued.

Operating profit after accounting for depreciation. Shows profitability before financing costs and taxes.

A measure of your core operating profitability, excluding financing and accounting decisions. Commonly used to value companies.

Non-dilutive funding that does not need to be repaid and does not require giving up equity. Typically awarded by government agencies, foundations, or accelerator programs based on specific criteria such as innovation, research, or social impact.

Gross profit expressed as a percentage of revenue. Higher margins mean more efficient production/delivery.

Revenue remaining after subtracting the direct costs (COGS). Shows how efficiently you deliver your product.

Borrowed money from a bank or lender that must be repaid with interest over a fixed term. Does not dilute equity but creates a repayment obligation. Monthly payments are calculated using standard amortization.

The total revenue you expect from a customer over their entire relationship with your company.

The predictable revenue you receive each month from subscriptions. Excludes one-time payments.

Your bottom-line profit after all expenses, including interest and taxes. This is what's actually left over.

New shares reserved for employee equity compensation (stock options). When created outside of a funding round, the pool dilutes all existing shareholders equally. When created as part of a round, it typically comes from the pre-money valuation and dilutes only the founders.

The value of your company immediately after receiving investment. Pre-money plus the investment amount.

The value of your company before receiving new investment. Used to calculate how much equity investors receive.

Shares typically issued to investors in priced rounds. Comes with preferential rights such as liquidation preference, anti-dilution protection, and sometimes dividends. Converts to common stock at IPO.

A funding round where shares are sold at a fixed price based on a pre-money valuation. Investors receive preferred stock and the company's ownership is diluted by a known amount.

Total income generated from your business activities before any expenses are deducted. This is your top-line number.

How many months your company can operate before running out of cash, assuming current burn rate continues.

Similar to a convertible note but simpler — not a loan, so there is no interest rate or maturity date. The investor receives the right to equity at a future priced round, subject to a valuation cap and/or discount.

Operating expenses that aren't directly tied to producing your product. Includes salaries, rent, marketing, and overhead.

The right to purchase shares at a fixed strike price in the future. Commonly granted to employees as part of compensation and subject to a vesting schedule (typically 4 years with a 1-year cliff).