Operon® The SaaS & Startup Glossary

A comprehensive collection of 193 foundational startup, SaaS, finance, product, engineering, and legal vocabulary terms organized across 12 operational categories.

SaaS

Subscription-based software delivered as a service

MRR

Monthly recurring subscription revenue

ARR

Annualized recurring revenue; commonly $\text{MRR} \times 12$

ACV

Annualized value of a customer contract

TCV

Total contract value over its full term

ARPA

Average revenue per account

ARPU

Average revenue per user

Bookings

Value of contracts or orders signed

Billings

Amounts invoiced in a period

Recognized Revenue

Revenue recorded as services are delivered

Deferred Revenue

Liability for service not yet delivered

Expansion MRR

Added recurring revenue from existing accounts

Contraction MRR

Recurring revenue lost from downgrades

Net New MRR

$$\text{New} + \text{expansion} - \text{contraction} - \text{churned MRR}$$

Usage-Based Pricing

Charges based on measured consumption

GTM

Go-to-market plan for acquiring and retaining customers

ICP

Ideal customer profile: best-fit company

Buyer Persona

Profile of the person involved in buying

Lead

Potential customer contact or organization

MQL

Marketing-qualified lead

SQL

Sales-qualified lead

PQL

Product-qualified lead based on product behavior

Sales Pipeline

Open deals organized by stage

Sales Funnel

Stages from awareness to purchase

Conversion Rate

Share completing a desired action

Win Rate

Share of eligible opportunities won

Sales Cycle

Time taken to close a deal

Pipeline Coverage

Qualified pipeline divided by sales target

CRM

Customer relationship management system

AE

Account executive; usually closes deals

SDR/BDR

Sales/business development representative

ACV Quota

Annualized contract value sales target

Sales Velocity

Speed at which opportunities become sales

Churn

Loss of customers or recurring revenue

Logo Churn

Share of customer accounts lost

Revenue Churn

Share of recurring revenue lost

GRR

Gross revenue retention; excludes expansion

NRR / NDR

Net revenue retention; includes expansion

Logo Retention

Share of starting accounts retained

Customer Cohort

Group sharing a starting period or characteristic

Cohort Analysis

Tracking comparable customer groups over time

Customer Health Score

Indicator of account success or churn risk

TTV

Time to value for a customer

Activation

Milestone indicating initial product value

Upsell

Move an existing customer to a higher-priced offer

Cross-sell

Sell a complementary product to a customer

Unit Economics

Revenue and costs per customer or other unit

CAC

Customer acquisition cost

LTV / CLV

Estimated customer lifetime economic value

LTV:CAC Ratio

Lifetime value divided by acquisition cost

CAC Payback

Time to recover acquisition cost from gross/contribution profit

COGS

Direct costs of delivering the service

Gross Profit

Revenue minus cost of revenue

Gross Margin

Gross profit divided by revenue

Contribution Margin

Revenue less defined attributable/variable costs

Fully Loaded Cost

Cost including stated allocated overhead

OpEx

Operating expenses

EBITDA

Earnings before interest, taxes, depreciation, amortization

EBIT

Earnings before interest and taxes

Operating Margin

Operating income divided by revenue

Net Profit Margin

Net income divided by revenue

Break-Even Point

Where defined revenue equals defined costs

Operating Leverage

Profit grows faster than revenue at scale

Cost-to-Serve

Cost of servicing a customer

P&L

Profit and loss statement

Balance Sheet

Assets, liabilities, and owners' equity

Cash Flow Statement

Cash inflows and outflows

Burn Rate

Rate at which cash is consumed

Net Burn

Cash outflows less cash inflows in a period

Runway

Time available cash can support operations

Working Capital

Current assets minus current liabilities

CapEx

Capital expenditures on longer-term assets

Cash Basis

Accounting generally tied to cash movements

Accrual Basis

Accounting when earned or incurred

Accounts Receivable

Money customers owe

Accounts Payable

Money owed to vendors

Depreciation

Allocation of tangible asset cost over time

Amortization

Allocation of certain intangible costs over time

Forecast vs. Budget

Latest expectation versus approved plan

Variance Analysis

Actual-versus-plan comparison

Bootstrapping

Funding without institutional equity investment

Pre-Seed

Earliest startup financing stage

Seed Round

Early capital for market validation and growth

Series A/B/C

Later rounds of venture financing

VC

Venture capital investor or fund

Angel Investor

Individual investing personal capital

Valuation

Estimated worth of company or interest

Pre-Money Valuation

Company value before new financing

Post-Money Valuation

Value after new equity investment

Enterprise Value

Value of operating business before financing adjustments

Equity Value

Value attributable to owners

Revenue Multiple

Valuation divided by defined revenue

Term Sheet

Outline of proposed transaction terms

SAFE

Simple agreement for future equity

Convertible Note

Debt with specified conversion terms

Valuation Cap

Conversion valuation ceiling under defined terms

Liquidation Preference

Priority to specified exit proceeds

Equity

Ownership interest in a business

Cap Table

Record of ownership and potential equity interests

Dilution

Percentage ownership declines with new issuance