Your SaaS terms glossary

Cash generated from normal business operations, essential for assessing financial health.

Expenses incurred from day-to-day operations, excluding production costs.

Operational Efficiency measures how well a company minimizes waste while maximizing productivity and profitability.

The time it takes to recover the investment cost, usually for marketing or customer acquisition.

Pipeline revenue estimates expected revenue from potential deals in the sales process.

The valuation of a company after outside funding or investment is added.

The valuation of a company before new outside investment or financing is added.

The earliest stage of funding a startup, essential for developing an MVP.

Product Market Fit indicates when a product meets market demand, crucial for startup success and scaling strategies.

Understand and compute the Quick Ratio for business liquidity.

Revenue Run Rate (RRR) estimates future annual revenue by extrapolating current performance.

Understanding recurring revenue's role in predictable business growth.

Renewals in a B2B SaaS (Software as a Service) context refer to the process of existing customers extending their...

Revenue-based financing offers flexible capital to businesses based on their recurring revenue, supporting growth.

A measure of how much revenue a company retains from its existing customers over a period.

Rule of 40 balances growth and profitability for SaaS success.

A measure of financial performance predicting future performance based on current data.

Run Rate Revenue calculates future revenue based on current performance.

Runway, in a business context, refers to the amount of time a company can continue to operate before it runs out of cash.

SAFEs let startups raise funds now for future equity, simplifying early fundraising without debt or interest.

A Sales Qualified Lead (SQL) is a prospective customer that has been vetted by the marketing team and meets specific...

SaaS model and its implications for businesses.

SaaS churn rate measures the percentage of subscribers discontinuing their subscription over time.

SaaS metrics are vital KPIs tailored for Software as a Service businesses to track growth and performance.