Click a term or metric below to reveal definitions, 1 minute videos, formulas, examples, and more. Curated by our team of Startup Finance experts.
A Unique Selling Proposition (USP) is a statement that defines the unique benefit that a product or service provides to its customers.
Let's talk about value! What is value, and why is it so important? When I think about value, I think about getting the most bang for my buck. I want to feel like I'm getting something worthwhile out of my investment.
Imposed Budgeting: Explained
Hey there! If you're like me, you love planning out your finances and maximizing your budget. But what happens when you don't have the luxury of making your own budget? Enter: imposed budgeting.
Risk Formula: Explained
As the CFO of a company, I’m all too familiar with the importance of keeping a close eye on risk. Whether you’re in finance, marketing, or any other industry, you know that risk can make or break a business. But what exactly is risk, and how can you calculate it?
Financial Performance Metrics and Reporting: Explained
As the CFO of a company, I know that financial performance metrics and reporting are crucial aspects that determine the success of a business.
Debt Service Coverage Ratio: Explained
Hey there, fellow finance enthusiasts! Today, I want to dive into a topic that might seem a bit dry at first but is actually essential to understanding the financial health of a company: the debt service coverage ratio.
Debt to EBITDA: Explained
As the Chief Financial Officer (CFO) of my company, one of my key responsibilities is to analyze financial metrics. Debt to EBITDA is a metric that is widely used in the financial industry, especially by investors, to assess the financial health of a company.
Top Down Budgeting: Explained
Are you struggling to create a budget for your business? Do you find yourself getting lost in the details and losing sight of the big picture? Then you need to try top-down budgeting!
Hi there! I'm the CFO of [company name] and today I want to talk to you about something really exciting! I know that doesn't sound right, but trust me, it is exciting - it's called liability.
What If Analysis: Explained
Hey, there! As a CFO, I know how essential it is to predict the future success of our company. When I first heard of the "what if analysis" tool, I was curious, confused and, to be honest, a little skeptical about how it could help our company. However, after trying it out, I became a believer.
Venture Capital (VC): Explained
Welcome to my guide on Venture Capital (VC)! In this article, we'll explore the thrilling world of startup funding, and how venture capitalists invest millions of dollars in businesses, expecting them to multiply that amount tenfold. Sounds crazy, right? Let's dive in!
Equity Multiplier: Explained
What’s up, fellow finance enthusiasts? It’s your favorite CFO here to discuss one of the most important financial ratios - the equity multiplier. This ratio is crucial in determining the amount of leverage a company is using to finance its assets.
Value at Risk: Explained
Oh, Value at Risk (VaR), how do I explain thee? Let me count the ways. Let's start at the very beginning: what is Value at Risk and why is it important?
Equity to Asset Ratio: Explained
Hey there friends, it’s your favorite finance guru; the CFO of the century, here with another easy-to-understand explanation of an important financial concept that will blow your mind!
Fiscal Year: Explained
Hi there, fellow business enthusiasts! As the CFO of a company, I know how confusing it can be to understand financial terms and jargon, especially when it comes to the fiscal year.
Net Present Value (NPV): Explained
Hey there! I’m excited to talk to you about net present value or NPV. It might sound like a dull topic, but trust me, it's fascinating when you get into the nitty-gritty of it.
Growth Multiple: Explained
Hey there, fellow finance enthusiasts! If you’re anything like me, you love a good financial ratio breakdown. That’s why I’m here to break down the growth multiple ratio.
Monte Carlo Simulation: Explained
The words “Monte Carlo simulation” might sound intimidating to those of us who aren’t mathematicians or statisticians. But let me tell you, my fellow CFOs, it’s one of the most helpful tools in our arsenal – and it’s not as complicated as it sounds.
Scenario Planning: Explained
Hey, guys! I’m excited to share with you all my knowledge about scenario planning. Disclaimer: I’m not a math genius or anything, but I did study business in college and I can say this is an incredibly useful tool for businesses.
Wholesale Revenue Model: Explained
Hey guys, welcome back to my blog! I recently stumbled upon a topic that has got me so excited that I just had to share it with you - the wholesale revenue model.
Long Term Liabilities: Explained
Hey there, fellow business enthusiasts! As the CFO of my company, I know how intimidating finance jargon can be. I’m glad you’re here, because today, I’m going to explain Long-Term Liabilities in a way that is easy to understand.
Average Collection Period: Explained
Hi there fellow finance enthusiasts! As someone who has spent a considerable amount of time digging through financial statements and crunching numbers, there's one metric that I've often found myself coming back to - the average collection period.
Discounted Cash Flow: Explained
Hey there, fellow finance fanatics! Today we're going to tackle one of the core concepts in financial modeling: the discounted cash flow (DCF) analysis. But don't fret if you're not a finance guru.
Terminal Value: Explained
Hey, you! Yes, you there! Are you curious about what "terminal value" is? Well, you've come to the right place! As the CFO of a company, I've dealt with a lot of financial terms and I know how daunting it can be to deal with them.
Free Cash Flow to Firm: Explained
Hey guys and gals, today I wanted to chat with you about what might be the nerdiest thing I've ever loved - Free Cash Flow to Firm (FCFF).
Earnings Before Interest Taxes Depreciation and Amortization (EBITDA): Explained
At first glance, Earnings Before Interest Taxes Depreciation and Amortization (EBITDA) may seem like a bunch of financial jargon that only accountants and CFOs care about. But trust me, understanding EBITDA is essential for anyone who wants to look smart while talking about financial figures.
Operational Analysis: Explained
Are you an entrepreneur who wants to make better business decisions? Do you wonder how to keep your business running smoothly without hiccups? Well, you are in the right place. I am here to help you understand operational analysis.
Operating Cash Flow: Explained
Hey there, fellow finance enthusiasts! Today, I want to talk about one of the most important financial metrics out there - operating cash flow. It's not as complicated as it might seem, and it's crucial to understanding the financial health of a company.
Accounting Close: Explained
Hey there, my fellow finance enthusiasts! Today, I'm going to share with you the inside scoop on the mysterious practice known as the accounting close.
Let's face it, taxes can be confusing. You're not alone if you feel bewildered and overwhelmed every time tax season rolls around. It seems like everyone from the government to your accountant is speaking in a language that you just don't understand. Trust me, I've been there.
Direct to Consumer (DTC) Revenue Model: Explained
Hey there, fellow marketing enthusiasts! Today, I want to talk to you about one of the most exciting revenue models out there - the Direct to Consumer (DTC) model. I can already feel the curiosity brewing inside you.
Drop Shipping Revenue Model: Explained
When it comes to starting an ecommerce business, the drop shipping revenue model has become a very popular choice. In simple terms, drop shipping is a fulfillment method that allows an online store to sell products without owning a inventory or shipping the products themselves.
Enterprise Value: Explained
Hey there, finance enthusiasts! Today, let's talk about the one metric that defines a company's worth like no other- Enterprise Value.
Price Earnings Growth (PEG) Ratio: Explained
Hey, fellow finance enthusiasts! Today, we’re going to deep dive into one of the most exciting yet sometimes complicated financial ratios out there: the Price Earnings Growth (PEG) ratio. Now, I know what you’re thinking, “Oh boy, this is going to be dry, boring, and probably hard to understand.
Transaction Processing: Explained
Hey there, fellow marketer! As a CMO, I absolutely love learning about all the different ways technology can improve our business processes. One of the most important aspects of any operation is transaction processing, and I'm here to give you a crash course on what that means and why it matters.
Company’s Profitability: Explained
Hey there, fellow go-getters! As a CFO myself, I know how important it is to keep our company’s profitability in check. But let’s be real here, finance and accounting jargon can be confusing and often intimidating to those not in the know.
Hey, guys! As the CFO of a company, I know a thing or two about overhead. In fact, I'd say I'm somewhat of an expert on the topic.
Cash Flow to Debt Ratio: Explained
Keywords: cash flow to debt ratio, cash flow, debt, company finances, financial ratio, financial metrics, CFO, business growth, debt obligations, business solvency, negative cash flow, positive cash flow, debt restructuring.
Subscription-based Revenue Model: Explained
Hey there! I’m excited to share with you some insights on subscription-based revenue models. You might have heard of this term floating around among entrepreneurs and CFOs in the business world. But what is it exactly and why does it matter, right?
Capital Budget: Explained
Hey there, fellow money-savvy peeps! Today, I'm going to talk about capital budgeting. Yes, I know it sounds like something straight out of an Accounting textbook, but bear with me here. I promise to make it as simple and fun as possible.
Budgeting Method: Explained
Yo yo my peeps! I’ve been playing the CFO game for quite a while now, and let me tell you - it’s all about budgeting! Budgeting is like the foundation of a house, without it, everything would crumble down. And trust me, nobody wants a financial apocalypse.
Asset Turnover Ratio: Explained
Hey there! As the CFO of my company, I know a thing or two about financial ratios. And today, I’m going to break down one of the most important ones: the asset turnover ratio.
Rolling Forecast: Explained
As the Chief Financial Officer (CFO) of my company, I am constantly in search of new ways to improve our financial planning process. One of the most useful tools that I have found is the rolling forecast.
Digital Transformation: Explained
Hey there! As a CFO, I was initially quite skeptical about digital transformation. I thought of it as just a trendy concept that had no real impact on the bottom line. But boy, was I wrong!
Active Planning: Explained
As a CFO, I know that planning is key. But not just any planning - active planning. It's the secret sauce that can take a company from good to great. And today, I'm here to share my secrets with you.
Customer Relationship Management: Explained - A Guide for Beginners
Hello there! I'm the CFO of this company, and I'm super excited to share with you all about customer relationship management (CRM) - an important concept in business that's often overlooked.
Stock Option: Explained
Hey there my fellow finance enthusiasts! Today, we are going to dive deeper into the world of investing by discussing the ins and outs of stock options.
Upselling and Cross Selling Revenue Model: Explained
Hey there! As a CFO, I'm always looking for ways to boost revenue. And let me tell you, implementing upselling and cross-selling strategies can do wonders for a company's bottom line. If you're not familiar with these terms, don't worry. I'm here to break it down for you.
Fixed Costs: Explained
Hey there, fellow business enthusiasts! Let me tell you something - if you're running a company, you must have heard the term "fixed costs." No, we're not talking about those costs that are trapped in a freezing winter season.
Cash Flow: Explained
Hey there! So, you want to learn about cash flow, huh? Well, you’ve come to the right place. As the CFO of a company, I know a thing or two about cash flow. And believe me, it’s a topic worth knowing.
Cash Flow From Financing Activities: Explained
As the CFO of my company, I've always had a keen interest in financing activities. I mean, after all, it is one of the three main components of cash flow, alongside operating and investing activities. If you're like me, then you'll be excited to learn all about cash flow from financing activities.
Vertical Analysis: Explained
Hey there, fellow marketers! Today, I want to talk about vertical analysis, a method of financial statement analysis that I've found incredibly useful in my career. If you're not familiar with it yet, don't worry - I'm here to break it down for you in a way that's easy to understand.
Business Case Development: Explained
Hey there, fellow entrepreneurs and decision-makers! It's your CFO here, ready to share a thing or two about business case development. I know, I know, it might not sound like the most exciting topic ever, but trust me, it's essential to your company's success.
Data Analysis: Explained
Hi everyone! I am thrilled to talk about my favorite topic in the world: data analysis. I know some people tend to associate this field with boredom, but I promise you, it's not as dry as you might think.
Financial KPIs: Explained
Hey there, fellow finance enthusiasts! Today, I am here to talk about the finance jargon that gets thrown around during corporate meetings and conference calls. Yes, I am talking about KPIs or Key Performance Indicators.
Predictive Analytics: Explained
Have you ever wondered how companies like Amazon and Netflix are able to recommend products and movies that you might like? They use something called predictive analytics.
Profitability Ratios: Explained
Hey, folks! It's your favorite CFO, and I'm here to talk about one of the most important financial metrics in any business: profitability ratios. I know, I know - it's not the sexiest topic in the world. But trust me, understanding these ratios is crucial to the success of your business.
Private Equity: Explained
Private equity is one of those things that sounds really complicated, but it's actually pretty simple. In fact, you might already be familiar with the concept if you've ever seen Shark Tank.
Depreciation Expense: Explained
Ah, depreciation. The bane of my existence as a CFO. Those dreaded expenses that just seem to keep coming and coming, eating away at our bottom line. But, as much as I might complain about it, the truth is that depreciation expense is an essential part of any business.
Capital Raise: Explained
When I first heard the term "capital raise," I thought it had to do with weight lifting. Maybe a new workout craze that I had missed. But as the CFO of my company, I quickly learned that a capital raise is something that every business needs to know about.
Retained Earnings on Balance Sheet: Explained
Hi there, fellow finance enthusiast! As a CFO, I know firsthand how important it is to understand the intricacies of the financial statements. Today, we're going to dive into the topic of retained earnings on the balance sheet and demystify this concept once and for all!
Acid Test Ratio: Explained
Hey there, fellow finance enthusiasts! Have you ever wondered what the acid test ratio is, or how it can help you understand the financial health of your company? Well, wonder no more, because I am here to explain it all to you!
Revenue Planning: Explained
Hey there, it's me, the CFO of your dreams. Just kidding, I'm not sure if I'm the CFO of your dreams or not, but I do know a thing or two about revenue planning, and I'm here to share my wisdom.
Gross Operating Income GOI: Explained
Are you curious about what Gross Operating Income or GOI means? Well, you're not alone. As a CFO of a company, understanding GOI is incredibly important, but it's not exactly a topic that gets the heart racing.
Business Planning: Explained
Hey there, future entrepreneurs! As a CFO and lover of business, I can tell you that business planning is fundamental to your success. It’s like embarking on a journey without a map – you might get somewhere, but it’s probably not where you want to go.
Present Value: Explained
Hey there, you savvy business enthusiasts! Today, I'm here to talk to you about one of the most important finance concepts - Present Value.
Variance Analysis: Explained
Let's talk about variance analysis. Sounds complicated, right? Well, it can be, but don't worry; I'm here to break it down for you in a way that even I can understand - and I'm the CFO!
Standard Deviation SD: Explained
Welcome to my world! The world of finance where everything seems confusing, especially the terminologies. However, we cannot avoid the use of these financial terms in our daily lives because they give us an accurate description of a situation.
Hey there, fellow entrepreneurs! As a CFO, I've had the chance to work with different companies and listen to various strategies that help businesses reach their goals. One of the terms that always pops up is "traction."
As the CFO of a company, I have witnessed firsthand the importance of governance. Governance can be defined as the set of processes, rules, and regulations that guide and control an organization. It includes everything from how decisions are made to how finances are managed.
Profit and Loss (P&L): Explained
As the CFO of my company, I pride myself on understanding every aspect of our finances. One of the most important financial statements that I review regularly is the P&L statement. If you're not familiar with this statement, don't worry! I'm here to explain it in simple terms.
Variable Costs: Explained
Let's talk about the "V-word" in business: variable costs. I know, I know, it doesn't sound like the most glamorous topic, but trust me, understanding variable costs is essential for any business looking to boost their profitability. So grab your coffee, get cozy, and let's dive right in!
When I first heard the term "modeling," I thought it referred to building tiny replicas of buildings and cars. But as I started to learn more about the world of fashion and entertainment, I realized that modeling meant something completely different.
Negative Churn refers to a scenario where a company's revenue is growing at a faster rate than its customer acquisition costs.
Downgrade MRR refers to the decrease in Monthly Recurring Revenue (MRR) that a company experiences as a result of customers downgrading their subscription plans or canceling their subscriptions altogether.
Contraction Revenue refers to the decrease in revenue that a company experiences as it loses customers and/or reduces its product offerings.
Expansion Revenue refers to the increase in revenue that a company experiences as it expands its customer base and/or product offerings.
A Unique Selling Proposition (USP) is a statement that defines the unique benefit that a product or service provides to its customers.
Growth hacking refers to a set of tactics and strategies that are specifically designed to help startups achieve rapid growth.
Term sheets outline the basic terms and conditions of a proposed investment. They're a crucial document in the process of raising capital for startups.
An MVP, is a development technique in which a new product is introduced to the market with minimal features, but enough to get feedback from early adopters.
An important part of the SAFE note is the valuation cap, which sets a limit on the price-per-share when the SAFE converts into equity.
Trailing Twelve Months (TTM) revenue is a financial metric used to measure the total amount of money your company has earned over the last twelve months.
Unit economics refers to the costs and profits associated with producing and selling individual units of a product or service.
Top line vs Bottom Line Growth
Top line growth refers to the total revenue generated by a business whereas bottom line growth measures net profits after all expenses have been deducted.
ROI vs ROE
Return on Investment (ROI) gives you a sense of what you get in return for an investment, Return on Equity (ROE) measures profitability relative to equity.
MAUs, or Monthly Active Users, are the number of users that have engaged with a company’s product or service within a given month.
Pro Rata Rights
Pro Rata Rights basically give investors the right to maintain their percentage ownership stake in a company...
A break-even point is the number of products or services that must be sold in order to cover...
Employee Share Option Pool (ESOP)
An ESOP is a pool of shares that are set aside for employees of the company.
A SAFE is a Simple Agreement for Future Equity. It is an investment contract between an investor and a...
Rule of 40
The Rule of 40 is a metric that is used to determine the health of a software company where reven...