Startup Finance & SaaS Operations

Revenue remaining after direct delivery costs

Revenue minus cost of goods or service delivery, usually expressed as a percentage of revenue.

Revenue remaining after variable costs

The amount each sale contributes towards fixed costs and profit after directly variable costs are removed.

Net cash burn divided by net new ARR

A SaaS efficiency metric comparing how much cash was consumed with recurring revenue added over a period.

A measure of sales and marketing efficiency

A ratio that relates growth in recurring revenue to prior-period sales and marketing spend; definitions vary, so methodology must be stated.

Growth rate plus profit margin

A SaaS rule of thumb that combines growth and profitability percentages to indicate overall balance.

Recurring revenue lost from existing customers

The percentage or amount of recurring revenue lost through cancellations or downgrades over a period.

Customer accounts lost

The percentage of customer organisations that cancel during a period, independent of account size.

Additional revenue from existing customers

Recurring revenue gained through upgrades, added seats, usage or cross-sell within the installed customer base.

Contracted Annual Recurring Revenue

The annualised recurring value of signed contracts, which may include amounts not yet active; companies must define it consistently.

Value of contracts signed in a period

A sales measure of committed contract value that is not the same as recognised accounting revenue.

Amounts invoiced to customers

The value billed during a period, which can differ from bookings, cash collected and recognised revenue.

Cash billed or received before revenue is earned

A balance-sheet liability representing obligations to deliver products or services in future periods.

Movement of cash into and out of a business

The timing and net effect of operating, investing and financing cash movements.

The point where revenue covers costs

The level of activity or time at which total income equals total costs and profit is zero.

Likely to reach profitability before cash runs out

A startup shorthand for whether current resources and trajectory could reach sustainability without new funding.

Interim financing between larger rounds

Funding intended to extend runway or reach a milestone before a planned major raise or transaction.

A funding round at a lower valuation

An investment round priced below the company's previous financing valuation, often causing greater dilution and signalling pressure.

Investor priority in distributing exit proceeds

A term defining how much preferred shareholders receive before or alongside ordinary shareholders in a sale or liquidation.