Startup & Venture Basics
Foundational concepts every employee at a venture-backed company should know.
18 terms
Beginner
Accelerator
A fixed-term program that provides startups with mentorship, funding, and resources in exchange for equity.
Angel Investor
A wealthy individual who invests personal funds in startups at the earliest stages.
Annual Recurring Revenue (ARR)
The annualized value of all active subscriptions or recurring contracts.
Burn Rate
How much cash a company spends per month beyond what it earns.
Churn
The rate at which customers cancel or stop paying for a product.
Customer Acquisition Cost (CAC)
The average cost to acquire one new customer, including sales and marketing spend.
Founder
A person who starts a company, typically receiving the largest equity stake.
Incubator
An organization that helps very early startups develop ideas, often providing workspace and mentoring.
Lifetime Value (LTV)
The total revenue a company expects to earn from one customer over the entire relationship.
Monthly Recurring Revenue (MRR)
The total predictable revenue a company earns each month from subscriptions.
Product-Market Fit
When a product satisfies strong market demand and customers keep coming back.
Runway
How many months a company can keep operating before running out of cash.
Startup
An early-stage company designed to grow fast and scale a repeatable business model.
Total Addressable Market (TAM)
The total revenue opportunity if a product captured 100% of its target market.
Venture-Backed
A company that has raised money from venture capital firms in exchange for equity.
Intermediate
Employee Stock Ownership Plan (ESOP)
A program that gives employees ownership in the company, usually through a stock option pool.
North Star Metric
The single metric that best captures the core value a company delivers to customers.
Serviceable Addressable Market (SAM)
The portion of TAM a company can realistically target given its current product and reach.
Other categories
Definitions are intended as plain-English educational summaries. Not legal, tax, or investment advice.