Glossary
Comprehensive definitions of startup and tech terms.
A
A/B Testing
A/B testing (split testing) means showing two versions of something to different users and measuring which performs better. Version A vs. Version B. Data wins, opinions lose.
Angel Investor
An angel investor is an individual who invests their own money in early-stage startups in exchange for equity. Angels typically write $10k-$100k checks and invest before VCs enter.
API (Application Programming Interface)
An API lets one piece of software talk to another. It's a set of rules and endpoints that define how apps can request data or trigger actions from a service.
ARR (Annual Recurring Revenue)
ARR is the yearly value of recurring subscription revenue. It's MRR × 12, normalized to show annual run rate. SaaS investors care about ARR more than MRR at scale.
B
Bootstrapping
Bootstrapping means building your company with personal savings, revenue from customers, or small loans—without taking venture capital. You own 100% and answer to customers, not investors.
Burn rate
Your "burn rate" represents your monthly expenses relative to your available capital. Calculate your company's potential runway by dividing your total funds by your burn rate.
C
CAC (Customer Acquisition Cost)
CAC is how much it costs to acquire one paying customer. Calculate it by dividing total sales and marketing spend by the number of new customers acquired in that period.
Churn Rate
Churn rate is the percentage of customers who cancel their subscription in a given period. It's the silent killer of SaaS businesses—you can't grow faster than you're losing customers.
CI/CD (Continuous Integration / Continuous Deployment)
CI/CD automates the process of testing and deploying code. Continuous Integration merges code changes frequently and runs automated tests. Continuous Deployment automatically pushes passing code to production.
Cohort Analysis
A method of grouping users by a shared characteristic (usually signup date) and analyzing their behavior over time to identify patterns in retention, engagement, and revenue.
Conversion Rate
Conversion rate is the percentage of visitors who complete a desired action. Could be signing up, starting a trial, making a purchase—whatever matters for your business.
F
Feature Flag
A software development technique that allows you to turn features on or off without deploying new code, enabling gradual rollouts, A/B tests, and safe experimentation.
Freemium
Freemium is a pricing model where the core product is free forever, but advanced features, higher limits, or premium support require payment. The free tier drives adoption, paid tiers drive revenue.
L
Lean Startup
A methodology for developing products and businesses through rapid experimentation, validated learning, and iterative product releases.
LTV (Lifetime Value)
LTV is the total revenue you expect from a customer over their entire relationship with your business. It's the north star for determining how much you can afford to spend on acquisition.
M
MRR (Monthly Recurring Revenue)
MRR is the predictable revenue your business generates every month from subscriptions. It's the north star metric for SaaS businesses because it shows growth trajectory independent of one-time sales.
MVP (Minimum Viable Product)
An MVP is the simplest version of your product that solves the core problem for early users. It has just enough features to validate your idea and gather feedback—nothing more.
N
North Star Metric
Your North Star Metric is the single metric that best captures the core value your product delivers to customers. It's the one number that predicts long-term success better than any other.
NPS (Net Promoter Score)
NPS measures customer satisfaction by asking one question: 'How likely are you to recommend this product to a friend?' (0-10 scale). Promoters (9-10) minus Detractors (0-6) = your NPS.
P
Pivot
A startup pivot is like a strategic shift or change of course. It's usually prompted by insights gained from user testing and analysis. Startups make pivots to adapt their product or strategy to better suit the needs and preferences of the market and their customers.
PLG (Product-Led Growth)
PLG is a go-to-market strategy where the product itself is the primary driver of customer acquisition, conversion, and expansion—not sales or marketing teams.
Pre-seed
Pre-seed is the earliest funding round before seed, typically $50k-$500k. Founders raise from angels, friends, family, or micro VCs to build an MVP and validate the idea before raising institutional seed.
Product-Market Fit (PMF)
Product-market fit happens when your product solves a real problem for a specific market so well that people actively seek it out, use it regularly, and tell others about it.
S
SaaS (Software as a Service)
SaaS is software delivered over the internet on a subscription basis. Instead of buying and installing software, users access it through a browser. No servers to manage, no updates to install.
Seed Funding
The first significant round of venture capital funding for a startup, typically used to validate product-market fit and build the initial team. Seed rounds usually range from $500k to $3M.
Seed Stage
The seed stage in bootstrapped startups is the initial phase. Founders use personal resources for activities like market research, product development, and early testing. External funding is not sought at this stage. The goal is to validate the business concept before scaling.
SEO (Search Engine Optimization)
SEO is the practice of optimizing your website so it ranks higher in Google search results. Higher ranking = more organic traffic = more customers without paying for ads.
Series A
Series A is typically the first institutional VC round after seed funding. Startups raise $2M-$15M to scale a proven business model. You need strong traction—revenue, users, growth—to raise a Series A.
Startup Incubator
Startup incubators are programs that offer early-stage companies and entrepreneurs mentorship, funding, and resources to help them grow. In exchange, incubators receive a share of the company's equity.
U
Unit Economics
Unit economics measures profitability per customer. It's the revenue one customer generates (LTV) minus the cost to acquire and serve them (CAC + COGS). Positive unit economics = you make money on each customer.
User Onboarding
User onboarding is how you guide new users from signup to their first moment of value. Great onboarding feels effortless. Bad onboarding means users churn before they understand what you do.