Series on Startup Lingo: C
…terms you should know
TGIF!!! Hope you had a productive week
Now on letter C. Let’s SEE the must know terms, shall we?
A camel is a startup that, unlike unicorns, are reaching for balanced growth. Camels don’t grow as fast as unicorns, and they are usually worth not as much in the short run compared to unicorns. However, they are resilient and have proved to be very profitable in the long run.
- Cap Table
This is an official document that describes the capital structure of a startup. It shows how the ownership of the business is divided and includes stocks and convertible notes. Cap table is short for capilization table.
- Cash Flow
Simply the money coming in and out of your business. Revenue>Expenses = Positive cash flow
Revenue<Expenses = Negative cash flow
- Churn Rate
Churn rate is also known as retention rate and refers to the rate at which customers stop using a product or service. It can be thought of as an indication of your customer loyalty.
- Cliff Vesting
Cliff vesting is when businesses offer their employees stocks as part of their pay. It’s used to engage employees and keep them employed for longer.
- Competitive Advantage
A competitive advantage is the things you do better than your competitors. A competitive advantage must be difficult, if not impossible, to duplicate. If it is easily copied or imitated, it is not considered a competitive advantage.
- Convertible Note
This is a way for an investor to loan money to a startup. Instead of receiving a return on their principal investment, they receive equity in the company. It’s a form of short-term debt that converts to equity. In terms of using a convertible note for seed funding, the debt automatically converts into shares when Series A closes.
In simple terms, asking a large number of people for a small amount of money each. There are several types of crowdfunding — pre-order, equity, and donations, to name a few. Many startups will offer pre-orders of their products or services at discounted rates to raise money via crowdfunding.
- Customer Acquisition Cost (CAC)
Customer Acquisition Cost is the total sales and marketing cost required to earn a new customer over a specific time period The term is used in marketing to measure the financial expense per sale. To calculate your CAC, you simply take the cost of marketing and divide it by the number of new customers from a certain period.
- Customer Relation Management (CRM)
Customer Relation Management is the process of building valuable relationships with customers, keeping track of and managing customer relationships. The point of CRM is to learn more about your customers to cater to their needs to retain customers and drive sales. For example, automated email updates to customers may be part of a CRM strategy.
There you have it,
Startup terms starting with the letter C
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