The 15 startup acronyms to learn first
Start with these if you are going to a founder event, speaking to investors or getting ready to raise. Jump to the quiz to test yourself.
Section 10 of 10
Flashcards
Start with these if you are going to a founder event, speaking to investors or getting ready to raise. Tap a card to see what it stands for.
VCTap to reveal
Venture capital
Firms that invest money from pension funds, institutions and wealthy individuals in young companies that could grow very large, in return for shares.
More in EssentialsPETap to reveal
Private equity
Investment in private companies, usually more established businesses than VCs back, often taking a controlling stake.
More in EssentialsMVPTap to reveal
Minimum viable product
The simplest version of a product that lets you test your key assumptions with real customers.
More in UK schemesPMFTap to reveal
Product-market fit
Evidence that a product meets a real market need: customers keep using it and pay for it.
More in UK schemesTAMTap to reveal
Total addressable market
The total demand for your type of product, if every possible customer bought it.
More in UK schemesMRRTap to reveal
Monthly recurring revenue
Revenue you can expect every month from subscriptions or contracts, leaving out one-off fees.
More in MetricsARRTap to reveal
Annual recurring revenue
Recurring revenue for a year, usually MRR × 12. It is not the same as total annual sales, which include one-off revenue.
More in MetricsCACTap to reveal
Customer acquisition cost
The average cost of winning one new customer: sales and marketing spend divided by the number of new customers.
More in MetricsLTVTap to reveal
Lifetime value (also CLTV, customer lifetime value)
What a customer is worth to you over the whole relationship, worked out with a stated method, such as monthly gross profit per customer divided by monthly churn.
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Return on investment
The profit from an investment compared with what it cost, usually as a percentage.
More in MetricsEBITDATap to reveal
Earnings before interest, taxes, depreciation and amortisation
A rough measure of operating profit before financing costs, tax and accounting charges for the wear on assets.
More in MetricsSAFETap to reveal
Simple agreement for future equity
The investor pays now for the right to shares later, usually at the next priced round. A standard SAFE puts SEIS and EIS relief at risk, so UK angels usually use an advance subscription agreement instead.
More in Valuation and equityESOPTap to reveal
Employee stock option plan
A plan that lets employees earn the right to buy shares, usually from an option pool. In the UK, the tax-advantaged scheme for smaller companies is EMI.
More in Valuation and equitySEISTap to reveal
Seed Enterprise Investment Scheme
A UK scheme that gives investors 50% income tax relief for buying new shares in qualifying very young companies.
More in UK schemesEISTap to reveal
Enterprise Investment Scheme
A UK scheme that gives investors 30% income tax relief, and other reliefs, for buying new shares in qualifying companies.
More in UK schemes
Try it with your numbers
Quiz: what do they stand for?
Fifteen questions in a random order. After each answer you see what the term means.
Test yourself
15 questions. Pick what each acronym stands for, and see the meaning after each answer.
Last checked . Estimates only, not financial, tax or legal advice: deal terms vary, so check your documents and take advice before you sign. More terms in the startup glossary.