Startup Glossary

Average Revenue Per Account

Average revenue per account (ARPA) is the average monthly recurring revenue (MRR) per customer.

Gross Margin

Gross margin is your company’s net sales revenue minus your Cost of Goods Sold (COGS).

New MRR

New MRR is the amount of MRR gained from new customers.

MRR Churn

MRR Churn is the amount of MRR lost due to downgrades or cancellations from your customers in a given period of time.

Burn Rate

Burn rate is defined as the negative free cash flow (FCF) during the month.

Research And Development Expenses

R&D expenses are all costs associated with the research and development of your product or service.

Customer Acquisition Cost (CAC)

Customer Acquisition Cost (CAC) is how much money you spend in sales and marketing to acquire one new customer.

CAC Payback

Customer Acquisition Cost (CAC) payback is the number of months it will take to recover the cost of acquiring a customer.

Cash Runway

Cash runway is the number of months until cash runs out.

Sales and Marketing Expenses

Sales and marketing expenses are the internal and external expenses incurred that are directly and indirectly related to selling and marketing a product or service.

General And Administrative Expenses

G&A expenses are expenses incurred that aren’t directly tied to producing or selling a product or service, but necessary to maintain business operations overall.

Monthly Recurring Revenue (MRR)

MRR is the amount of predictable revenue your business earns each month from customers.