VC Speak Cheatsheet

Building the product so the API (application programming interface) is the actual product and any dashboard or UI is just a thin layer on top.

The yearly value of all active subscriptions in ARR (Annual Recurring Revenue), counted as if every customer keeps paying at today's rate for the next twelve months.

A clause that gives earlier investors more shares (or a better conversion price) when a later round prices lower, so their stake doesn't get punished by the cheaper round.

A small, fast financing (usually SAFEs or convertible notes from existing investors) raised between two priced rounds to extend runway until the company is ready to price a proper next round.

How much cash you burn for every dollar of new ARR you add, where under 1 is efficient and over 2 means growth is costing way too much.

Everything you spend to land one new paying customer in CAC (Customer Acquisition Cost), fully loaded across ad budget, sales team comp, and the tools they run on.

The share of customers or revenue that walks out the door in a given period, tracked as logo churn (count of customers gone) or revenue churn (dollars gone).

When adding more users on one side of a platform (like drivers) makes the product more valuable for the other side (like riders), and vice versa.

Whether your current growth rate gets you to profitability before the bank account hits zero, a sharper question than runway because it folds in whether you are actually catching up.

When a newcomer wins by attacking the cheap, ignored end of a market with a simpler good-enough product, then improves until it eats the incumbents from below.

A new round priced below the last one, which marks the company down and usually triggers anti-dilution adjustments for earlier preferred holders.

A business loop where each turn feeds the next, so growth, quality, or cost gets a little better every cycle and eventually becomes unstoppable.

Giving the core product away free forever and earning money from the small slice of users who pay to unlock limits, features, or extra seats.

Software that solves a generic problem (chat, CRM, file storage) sold to every industry at once, where the market is huge but the competition is brutal.

The total gross-margin dollars a customer is expected to leave behind across their entire relationship with you in LTV (Lifetime Value), shrinking as churn rises and stretching out as they stick around.

How much gross margin a customer eventually pays back compared to what they cost to acquire, where investors want at least 3:1 to believe the business model actually works.

The investor who anchors a round by setting the valuation, writing the biggest check, and usually taking the board seat, with everyone else filling in around their terms.

The clause that guarantees investors get their money back (sometimes a multiple of it) before founders or employees see a dollar from an acquisition.

When customers stay not because you're the best option, but because leaving would cost them more than putting up with you.

A clause (Most Favored Nation) that lets an early investor automatically inherit any better economic terms, like a lower cap or bigger discount, that a later investor negotiates in the same round.

The predictable subscription revenue your customers owe you this month in MRR (Monthly Recurring Revenue), with one-time fees and usage spikes stripped out so the number actually repeats.

How much new annual recurring revenue you get back for every dollar of sales and marketing you spent the quarter before, where above 0.75 is a green light to hire more reps.

The thing competitors can't easily copy that keeps your customers from leaving, whether that's scale, brand, network effects, switching costs, or proprietary data.

The year-over-year change in spend from your existing customer base in NDR (Net Dollar Retention), with upsell and expansion adding to it and churn and downgrades pulling it down, but no credit for new logos.

The twelve-month change in revenue from an existing customer cohort in NRR (Net Revenue Retention), counting upsell, downgrade, and churn but no new logos, and used almost interchangeably with NDR (Net Dollar Retention).

A dynamic where each additional user makes the product more valuable for every other user, so growth compounds and late competitors struggle to catch up.

Giving the core code away free and selling everything around it: hosting, support, enterprise add-ons, or a managed cloud version of the same software.

A block of shares (usually 10% to 20% of the company) set aside for future employee grants, almost always carved out of the pre-money so existing shareholders absorb the dilution, not the incoming investor.

A structured change of strategy, product, customer, or business model that keeps one foot planted in what the team already learned and swings the other foot somewhere new.

The difference between a tool customers use directly (product) and a layer other businesses build their own products on top of, where you take a cut while they do the work (platform).

The contractual right (not the obligation) for an investor to buy enough of a future round to keep their current ownership percentage intact.

The gap between revenue you earned this period under accounting rules and cash you actually invoiced, which can stretch to 12x when a customer prepays a full year up front.

A single-number health check that adds your growth rate to your profit margin, where anything above 40% lets a fast-growing money-loser and a slow-growing cash machine pass the same bar.

Everything a customer has to pay, redo, or risk to swap your product for a competitor's, in money, time, retraining, and migrations.

The short, mostly non-binding document laying out the headline terms of an investment (valuation, check size, board, preferences, vesting), signed before the lawyers start drafting the 100-page closing docs.

A platform with two groups of users who transact with each other, where your job is to bring both sides on at the same time and take a cut of every match.

Software built for one industry's specific workflow and lingo, trading a smaller market for tighter fit, stickier customers, and fewer competitors.