PEDALGUIDE: STARTUP TERMS

YOU NEED TO KNOW

Edition-5
 1. TAM/SAM/SOM 2. MVP 3. Burn Rate 4. Runway
- **Total Addressable Market
(TAM)**: Total revenue opportunity if - Minimum Viable - Gross Burn: The total - The number of
a product/service achieved 100% Product: The simplest monthly expenses of a
market share. months a company
- **Serviceable Available Market version of a product company. can continue to
(SAM)**: The segment of TAM that can still solve the - Net Burn: The amount
targeted by a company's products & operate before
identified problem, used of money a company
services. running out of
- **Serviceable Obtainable Market to test and validate the loses each month after money.
(SOM)**: The portion of SAM that can market. accounting for revenue.
be realistically captured.

5. MRR 6. TTM 7. ARPU 8. ARR

- Monthly Recurring - Trailing Twelve - Average Revenue - Annual Recurring
Revenue: The Months: The Per User: The Revenue: The
predictable revenue revenue a startup average revenue annualized
generated from has generated in the generated per user subscription
customers on a past twelve months. or customer. revenue a company
monthly basis. expects to receive.
 9. CAC 10. LTV 11. TCV 12. ACV
- Customer - Lifetime Value: The - Total Contract Value: - Annual Contract
Acquisition Cost: total revenue a The total revenue from Value: The annualized
The cost business can expect a customer contract, revenue from a
associated with from a single customer including both upfront customer contract.
acquiring a new account over its and recurring revenue.
customer. lifetime.

13. Deferred Revenue 14. Total Billings 15. MAU/WAU/DAU 16. Conversion Rate

- Money received - Actual revenue - Monthly/Weekly/Daily - The percentage of

for goods or services plus deferred Active Users: The users who take a
not yet delivered. revenue within a number of unique users desired action, such as
given period. engaging with a product upgrading from a free
within a given tier to a paid tier.
timeframe.
 17. CMGR 18. CAGR 19. Retention 20. Gross Churn
- Compound Monthly - Compound Annual - The percentage of - The percentage of
Growth Rate: The rate Growth Rate: The users who continue total customers or
at which revenue or annual growth rate of to use a product over revenue lost during
another metric grows an investment over a a specified period. a given period
month over month, specified period of without accounting
compounded. time. for new business.

21. Net Churn 22. Negative Churn 23. Zero Marginal 24. R + K > 1
- The percentage of - When the revenue Cost - A key metric indicating
revenue lost from gained from existing - The cost of producing that the combined
existing customers, customers through an additional unit of a effects of retention (R)
accounting for upgrades or product is effectively and virality (K) result in a
upgrades or expansions exceeds zero, common in growing customer base
expansions. the revenue lost from software and digital without significant paid
churn. media. marketing efforts.
 25. Churn Rate 26. Unit Economics 27. Freemium 28. Product-Market
Fit
- The percentage - The direct revenues - A pricing strategy - The degree to
of customers who and costs associated where basic services which a product
stop using a product with a particular are provided free of satisfies a strong
or service during a business model, charge while more market demand.
given period. expressed on a per advanced features
unit basis. must be paid for.

29. Pivot 30. KPI 31. Bootstrapping 32. Customer

- A fundamental Lifetime Value (CLV)
- Key Performance - Building a company
change in the Indicator: A from the ground up - The total worth to a
direction of a measurable value that with personal savings business of a customer
startup, usually in demonstrates how and the revenue from over the whole period
response to effectively a company initial sales. of their relationship.
feedback or market is achieving key
conditions. business objectives.
 33. Scalability 34. Equity 35. Seed Round 36. Series A/B/C
- The capability of a - Initial Public Offering: - The first official equity - Funding rounds that
company to grow and The first time that the funding stage, often take place after the seed
manage increased stock of a private involving "angel" round, typically involving
demand. company is offered to investors and venture capital firms
the public. sometimes early-stage investing larger amounts
venture capital firms. of capital.

37. Exit Strategy 38. IPO 39. Cap Table 40. Dilution
- A plan for how the - Initial Public Offering: - Capitalization Table: A - The reduction in
founders and investors The first time that the spreadsheet or table that ownership percentage
will realize a return on stock of a private shows the ownership of existing
their investment, company is offered to stakes, types of equity, shareholders due to
typically through an the public. and dilution of equity for the issuance of new
IPO, acquisition, or each stakeholder in a shares.
merger. company.
 41. Down Round 42. Term Sheet 43. Run Rate 44. EBITDA
- A financing round in - A non-binding - The financial - Earnings Before
which investors agreement that performance of a Interest, Taxes,
purchase stock from a outlines the basic company based on Depreciation, and
company at a lower terms and conditions extrapolating current Amortization: A
valuation than the under which an results over a longer measure of a
previous round. investment will be period. company's overall
made. financial performance.

45. Payback Period 46. API 47. SDK 48. B2B/B2C

- The amount of time it - Application - Software - Business 2 Business:
takes for an Programming Development Kit: A Companies that sell
investment to generate Interface: A set of collection of software products or services to
an amount of income protocols and tools for tools and libraries that other businesses.
or cash equivalent to building software and developers use to - Business 2 Consumer:
the cost of the applications. create applications for Companies that sell
investment. specific platforms. products or services
directly to consumers.
49. Network Effects 50. Virality

- The phenomenon where - The financial performance

a product or service gains of a company based on
additional value as more extrapolating current results
people use it over a longer period.
 CONCLUSION
This guide offers essential startup terms to boost your vocabulary and
understanding of the startup ecosystem. Perfect for founders, investors,
and entrepreneurs, it equips you with the knowledge to navigate and
communicate effectively in the startup world.