Blog / Books September 24, 2016

Business Terms Reference

Burn: Amount of cash ut takes to keep the company running
Runway: Months of burn

Bootstrapping: Using own money to get company up
Angel investors: Anyone who can write a check to you 500$-100k+
Super Angeles: Invests 100k+
Private equity:

Strategic Investors: Generally companies who are interested early on in your company.

ROI: Return on investment

IRR: Average return on all investments

Yield: percentage gained on investment

Volatility: The mood of share holders. Bad mood equals to sold stocks

Blue Chip Stock: Big time companies micr/Apple/ect

Equity: the worth of the asset minus liabilities(mortgage, payments, ect). Net assets

Capitol: money to grow company

Stock: Partial ownership of company(right: votes/ect)

Share: Pieces of stock

Portfolio: Collection of investments

IPO: Initial public offering first time they issue/sell stock

Bond: Lend money to company by buying from company and returned guaranteed money, but low yield

Margin: percent or amount a product has after development expenses and it’s sold

Royalties: a sum of money paid to a patentee for the use of a patent or to an author or composer for each public use of a song or each book sold.

Unit: Product sold

Mutual fund: investment that’s pieces with others that is invested by someone else

Index/indices: represents the value of the market. If it goes up or down in value

Cash flow: what’s left expenses and revenue is added up over a month

Stakeholder: individual or organization who’s affected by the project.

Requirement: condition, capability, function

Project: launch to solve a certain business problems, adds lie to org, delivers a solution with product or service with a dedicated team.

Deliverable: something to be done with a deadline.

Gross: All money mad

Net: Money after liabilities

Intellectual properties:

Crowd Funding: Kick starters

Subscriptions:

Lifetime Value Of A Customer: Multiply your average revenue per subscriber per month by the average number of months that a subscriber stays.
Customer acquisition cost. This includes pay-per-click and other marketing efforts averaged out over paying customers. Divide your sales and marketing costs by the number of customers. That’s your customer acquisition costs.

Churn. The churn is an indicator of what percent of fremiums and what percent of paid subscribers drop out per month. Some calculate the average months instead, generating a lifetime value per customers. Those are just two sides of the same coin.
Conversions. A conversion happens when a person browsing on the website chooses to subscribe. Conversions per visit for fremiums, which offer a free basic version of the product and for paid subscriptions are useful. Another useful projection is conversions from fremium to paid. Projected traffic. The most useful and standard projections estimate future unique visitors per month. Tracking this number over time is essential. Visits are also useful because the combination of visits and unique visitors is an indication of repeat visits, which can be an asset. Hits, as we used to call them in the 1990s (numbers of pages accessed and images viewed) are no longer a good measurement. Average time on site is also a useful indicator, especially when tracked over time.