Startup Glossary

Clear definitions for every startup, VC, and SaaS term that matters.

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A
AI Hallucination AI hallucination occurs when a large language model generates plausible-sounding but factually incor… API An Application Programming Interface (API) is a set of protocols and rules that allows software prod… ACV Annual Contract Value (ACV) is the average annualized revenue per customer contract, excluding one-t… ARR Annual Recurring Revenue (ARR) is the value of recurring subscription revenue normalized to a yearly…
B
B2B / B2C B2B (Business-to-Business) describes companies that sell primarily to other businesses. B2C (Busines… Bootstrapped A bootstrapped startup is one that's funded entirely by its founders using personal savings, early r… Burn Rate Burn rate is the rate at which a startup spends its venture capital before generating positive cash …
C
CAC Customer Acquisition Cost (CAC) is the total cost of acquiring a new customer, including marketing, … Cap Table A capitalization table (cap table) is a document showing the equity ownership stakes, market value, … Churn Rate Churn rate is the percentage of customers or revenue a business loses over a given period. Customer … Cohort Analysis Cohort analysis is a method of tracking a group of users who share a common characteristic — typical…
D
Dark Launch A dark launch is when a new feature or change is deployed to a subset of users or in the background … DAU / MAU Daily Active Users (DAU) and Monthly Active Users (MAU) are engagement metrics measuring how many us… Due Diligence Due diligence is the investigation and audit process investors perform before committing to a fundin…
E
EBITDA EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) is a measure of a company's… Equity Dilution Equity dilution occurs when a company issues new shares — through a funding round or option grants —… Exit Strategy An exit strategy is how founders and investors plan to eventually monetize their stake in a company.…
F
Feature Flag A feature flag (or feature toggle) is a software technique that allows teams to enable or disable sp… Freemium Freemium is a pricing strategy where the core product is free and premium features, capacity, or acc… Funnel A marketing or sales funnel is a model representing the stages a prospect moves through on the way t…
G
GEO Generative Engine Optimization (GEO) is the practice of optimizing content to appear in and be cited… Go-to-Market (GTM) A go-to-market (GTM) strategy is the plan a company uses to launch a product, reach target customers… Growth Hacking Growth hacking is a mindset and practice of running rapid, low-cost experiments across product, mark…
H
Hockey Stick Growth Hockey stick growth describes a company's growth trajectory that resembles a hockey stick: a long fl… Hyperscaler A hyperscaler is a large cloud infrastructure provider — primarily AWS, Microsoft Azure, and Google …
I
ICP An Ideal Customer Profile (ICP) describes the hypothetical perfect customer who would get the most v… IPO An Initial Public Offering (IPO) is the process by which a private company offers shares to the publ… Infrastructure as Code Infrastructure as Code (IaC) is the practice of managing and provisioning cloud infrastructure throu…
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J-Curve The J-Curve describes a pattern where performance initially declines before rising sharply — forming… Jobs to Be Done Jobs to Be Done (JTBD) is a framework for understanding customer motivation. Rather than focusing on…
K
KPI A Key Performance Indicator (KPI) is a quantifiable measure used to evaluate how effectively a compa…
L
LLM A Large Language Model (LLM) is a type of AI model trained on massive text datasets to generate, sum… Lead Scoring Lead scoring is a methodology for ranking inbound leads by their likelihood to convert into paying c… LTV Customer Lifetime Value (LTV or CLV) is the total revenue you can expect from a single customer acco…
M
Moat A moat is a durable, defensible competitive advantage that protects a business from rivals over time… MRR Monthly Recurring Revenue (MRR) is the predictable total revenue generated by your business from all… Multitenancy Multitenancy is a software architecture where a single instance of an application serves multiple cu…
N
NPS Net Promoter Score (NPS) is a measure of customer loyalty and satisfaction. Customers are asked 'How… NRR Net Revenue Retention (NRR or NDR) measures the percentage of recurring revenue retained from existi…
O
OKR OKRs (Objectives and Key Results) are a goal-setting framework that links high-level qualitative obj… Open Source Open source software is code made publicly available under licenses that allow anyone to inspect, mo…
P
PLG Product-Led Growth (PLG) is a go-to-market strategy where the product itself is the primary driver o… Product-Market Fit Product-Market Fit (PMF) is the degree to which a product satisfies a strong market demand. Achievin… Product-Market Fit Product-Market Fit (PMF) is the degree to which a product satisfies a strong market demand. Achievin… Pivot A pivot is a deliberate, structured course correction in a startup's business model, product, or tar… Pipeline A sales pipeline is the collection of potential deals or leads a sales or marketing team is actively… Pre-Seed Pre-seed is the earliest stage of startup funding, used to validate an idea, build an MVP, or hire f…
Q
QBR A Quarterly Business Review (QBR) is a structured meeting between a vendor and a customer — typicall… Quota A quota is a revenue or activity target assigned to a sales representative or team for a given perio…
R
RAG Retrieval-Augmented Generation (RAG) is an AI architecture pattern that combines a language model wi… Retention Retention is the percentage of customers or users who continue engaging with a product over a given … Runway Runway is the amount of time a startup has before it runs out of cash, calculated as current cash re…
S
SaaS Software as a Service (SaaS) is a cloud-based software delivery model where applications are hosted … SAFE Note A Simple Agreement for Future Equity (SAFE) is a financing instrument created by Y Combinator. It's … SEO Search Engine Optimization (SEO) is the practice of improving a website's visibility in organic (unp… Seed Round A seed round is an early-stage funding event used to build an initial product, hire a core team, and… Series A / B / C Series A, B, and C are sequential institutional venture funding rounds, each used to scale a proven …
T
TAM Total Addressable Market (TAM) is the total revenue opportunity available if a product captured 100%… Term Sheet A term sheet is a non-binding agreement that outlines the key terms and conditions of an investment … Token (AI) A token is the basic unit of text that a language model processes — roughly 3–4 characters or about …
U
Unicorn A unicorn is a privately held startup company that has achieved a valuation of $1 billion or more. T… Unit Economics Unit economics describes the direct revenues and costs associated with a particular business model e… Upsell An upsell is a sales motion that encourages existing customers to move to a higher-tier plan, increa…
V
Venture Capital Venture Capital (VC) is a form of private equity where institutional funds invest in high-growth sta… Vesting Schedule Vesting is the process by which founders and employees earn their equity stake over time. Standard s… Viral Coefficient The viral coefficient (K-factor) measures how many new users each existing user brings in. K = (invi…
W
Waterfall Model The Waterfall model is a traditional software development methodology where each phase — requirement… Webhook A webhook is an HTTP callback that allows one application to send real-time data to another when a s… White-Label A white-label product is built by one company and rebranded and resold by another under their own na…
X
XML / JSON XML (eXtensible Markup Language) and JSON (JavaScript Object Notation) are the two dominant data int…
Y
Y Combinator Y Combinator (YC) is the world's leading startup accelerator, running twice-yearly cohorts where it … YoY Year over Year (YoY) is a method of comparing a metric against the same period in the prior year, el…
Z
Zero-Day A zero-day is a software vulnerability that is unknown to the vendor, giving them zero days to fix i… Zero to One Zero to One is the concept popularized by Peter Thiel's book of the same name. It describes the chal…