Business Models
In this business model, businesses pay monthly or yearly to access the technology on the Internet.
Software-as-a-Service (SaaS)
**This concept describes the self-reinforcing cycle of growth that accelerates a company's success.
The Startup Flywheel
The initial version of a product with basic features, released to gather user feedback.
Minimum Viable Product (MVP)
**The change in the value of a specific metric as a percentage of the previous month's value
Month over Month growth
Delaware C Corp
In this business model, companies charge a monthly or yearly payment to individuals for using their app or service.
Consumer subscription
The difference between customers and users.
Customers pay. Users do not.
High-net-worth individuals who provide early-stage funding to startups in exchange for equity.
Angels or Angel Investors
The sum of all direct costs associated with making a product
Cost of goods sold (COGS)
This investment vehicle (& it's abbreviation) is most commonly used for early-stage fundraising.
Simple Agreement for Future Equity, commonly known as a YC SAFE
In this business model, a company earns revenue by taking a percentage of transactions between buyers and sellers on its platform.
Marketplace
the initial narrow segment of the market that a startup targets first, often with the highest need and shortest sales cycle.
beachhead market or ICP
This term refers to the rate of a company's development, testing, and market delivery (commonly emphasized in Agile and Lean practices)
Product velocity
**Businesses use this index to gauge the profitability and sustainability of attracting new clients compared to their overall contribution over time.
CAC:LTV ratio
A group of accredited investors who pool their financial resources to collectively invest in startups.
Angel Syndicate
In this model, companies charge customers based on specific metrics related to product or service consumption, like API calls.
Usage-based or Pay-as-you-go
Before building, founders must complete this step to align the product with market demands -- reducing the risk of business failure.
Customer discovery
A detailed record of a startup's ownership, listing shareholders and their respective stakes.
Cap table
The 1.___ affects a company’s financial 2.___, which is how long the company has before its operating capital is exhausted.
Burn
Runway
This fundraising term refers to the investor who sets the terms for the round and usually writes the biggest check.
Lead Investor
**Which TWO models encompass earning income by monetizing digital real estate and clicks, and typically are not considered VC scale models?
Ad-based and affiliate marketing
Investors seek out high-growth companies, known as unicorns, which are expected to achieve a valuation of $__, by reaching $__ in annual recurring revenue.
$1B+
$100M+
This Latin term, meaning "in proportion," is used in startup funding to describe an investor's right to maintain their ownership percentage in future funding rounds.
Pro rata
The calculation for a Bottom Up TAM.
the number of potential customers
x
the average revenue per customer per year
= TAM
Recently, the average WoW growth for YC companies is __.
~10%