Startup Glossary

Average Revenue Per User (ARPU)

ARPU is the average monthly recurring revenue (MRR) per user.

Revenue Retention

Revenue retention is the percentage of your revenue that is retained over a given period of time.

Negative Churn

Negative churn is when new revenue from existing customers (expansion MRR) is greater than the amount of revenue you lost from cancellations and downgrades (churned MRR).

Leads

A lead is a person who has a potential interest in your product or service.

Operating Profit

Operating profit is a company’s earnings after deducting operating expenses and Cost of Goods Sold (COGS). It’s also known as EBIT (earnings before interest and taxes). 

Gross Profit

Gross profit is a company’s earnings after deducting the Cost of Goods Sold (COGS).

LTV:CAC Ratio

LTV:CAC ratio compares how much a customer spends with you over their lifetime to how much it costs to acquire them.

Cost of Goods Sold (COGS)

Cost of Goods Sold (COGS) refers to the direct costs associated with producing your product or service.

Expenses

Expenses are the costs incurred by a company during typical business activities and operations.

Customer Lifetime Value (CLV)

Customer lifetime value (LTV) is how much revenue one customer generates for your business over time.

Lead Conversion Rate

Lead conversion rate is the percentage of leads that will convert into paying customers.

Cost Per Lead (CPL)

Your cost per lead is the amount of money you spend to acquire a new lead.