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Glossary

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AI-Enabled

Refers to technologies or systems that incorporate artificial intelligence (AI) to enhance or automate tasks and decision-making processes.

Angel Investor

An individual who provides capital to startups or early-stage businesses in exchange for ownership equity or convertible debt.

B2B

Abbreviation for "business-to-business," describing transactions or relationships between companies, rather than between businesses and consumers.

B2C

Abbreviation for "business-to-consumer," referring to commerce and interactions between businesses and individual consumers.

Blockchain

A decentralized and secure digital ledger technology used for recording and verifying transactions across a network of computers.

BioTech

Short for "biotechnology," it encompasses the use of biological processes and living organisms to develop products and technologies, often related to healthcare or agriculture.

Due Diligence

The process of thoroughly researching and investigating a potential investment, acquisition, or business deal to assess its risks and benefits.

E-Commerce

Electronic commerce involves the buying and selling of goods and services over the internet or other digital platforms.

EV

Abbreviation for "electric vehicle," which is a vehicle powered by electricity rather than traditional internal combustion engines.

IPO

Initial Public Offering.


The first sale of a company's stock to the public, allowing it to be traded on a stock exchange.

SaaS

Software as a Service is a cloud-based software distribution model where software applications are hosted by a third-party provider and accessed by users over the Internet.

Web 3.0

An evolving concept of the internet that envisions a more intelligent, interconnected, and semantic web, where data is better understood and utilized by machines.

Portfolio

A collection of investments, assets, or projects held by an individual or organization for financial purposes.

Pre-seed

An early stage of financing for startups is often used to develop a concept or prototype before seeking larger investments.

Pre-vetted

Refers to candidates, investments, or opportunities that have undergone initial screening or assessment to ensure they meet certain criteria.

SAM

Serviceable Addressable Market.


The portion of a market that a company or product can realistically serve or target.

Seed

Early-stage funding is provided to startups to help them grow and develop their business ideas or products.

Series A

The first significant round of financing for a startup after the seed stage is typically used to scale operations and expand.

Series B

A subsequent round of financing for startups that have already achieved certain milestones and are looking to further grow and develop.

Series C

A later stage of funding for startups focused on expanding into new markets, scaling, or preparing for an IPO.

SOM

Serviceable Obtainable Market.


The portion of the addressable market that a company can realistically capture and serve.

Startup

A newly established business or company is often characterized by innovative ideas and the potential for rapid growth.

TAM

Total Addressable Market.


The entire potential market size for a product or service, assuming 100% market penetration.

MVP

Minimum Viable Product.


The simplest version of your product that at least partly solves the problem you identified

Burn Rate

Gross burn in the company's total expenses in a given period. Net burn is how much cash is actually veing spent (i.e. gross burn minus income)

Runway

How many months your business can keep operating before it runs out of money

MRR

Monthly Recurring Revenue


The company's total monthly subscription revenue

TTM

Trailing Twelve Months revenue


How much revenue your startup produced in the previous twelve months

ARPU

Average Revenue Per User


This is important because it costs money to add users, so how much is each one worth?

ARR

Annual Recurring Revenue


The company's total annual subscription revenue

CAC

Customer Acquisition Cost


The company's total monthly subscription revenue

LTV

Lifetime Value


In total, how much revenue does each user bring you before ceasing to be a customer?

TCV

Total Contact Value


The combined value of a customer, including up-front and recurring fees

ACV

Annual Contact Value


How much a customer. isworth to you over the course of a year

Deferred Revenue

Money received for goods or services that have not yet been produced/delivered

Total Billings

Actual revenue plus deferred revenue in a given period

MAU

Monthly Active Users


The number of people engaging with your product in a specified period

WAU

Weekly Active Users


The number of people engaging with your product in a specified period

DAU

Daily Active Users


The number of people engaging with your product in a specified period

Conversion Rate

Often used in SaaS to reflect the percentage of users that upgrade from the free tier to the paid tier

CMGR

Compound Monthly Growth Rate


Often just called MoM/month-on-month growth rate, this is usually a key metric for investors

CAGR

Compound Annual Growth Rate


CAGR(%) = (Ending Value / Beginning Value) ^ (1 / Number of Periods) - 1

Retention

The percentage of users of customers which return to your service or use your product within a defined time period

Gross Churn

The percentage of revenue lost due to cancellation or downgrades

Net Churn

When expansion revenue is greater than revenue lost through gross churn

Zero Marginal Cost

Where an additional unit can be produced and sold without any increase in the total cost of production

R + K > 1

An important metric for tracking whether growth is powered by retention (R) and virality (K) and not just by paid marketing

 

A2D Ventures' streamlined digital platform empowers angel investors & family offices to effortlessly discover, evaluate, and invest in the region's most promising startups. Explore Opportunities at A2D here: https://www.a2dventures.com/

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