Glossary

Plain-language definitions for the finance and SaaS terms used across FounderCalc's calculators.

• ARR (Annual Recurring Revenue) — The yearly value of a subscription business's recurring revenue, normalized across billing periods.
• LTV (Customer Lifetime Value) — The total revenue (or profit) a business expects to earn from a customer over the entire relationship.
• ACV (Annual Contract Value) — The average yearly value of a single customer contract — how sales and SaaS businesses size individual deals.
• COGS (Cost of Goods Sold) — The direct costs of producing whatever a business sells — materials, direct labor, and production overhead.
• Rule of 40 — A SaaS health check: growth rate + profit margin should add up to 40% or more.
• ICP (Ideal Customer Profile) — A description of the type of company or customer that gets the most value from a product — and is most likely to buy, renew, and expand.
• EBITDA — Earnings Before Interest, Taxes, Depreciation, and Amortization — operating profitability with financing and accounting choices stripped out.
• Cap Table (Capitalization Table) — A ledger of who owns what percentage of a company — every shareholder, option holder, and investor, and how new funding rounds dilute them.
• NRR (Net Revenue Retention) — The percentage of recurring revenue kept from existing customers over a year, including upgrades and downgrades — can exceed 100%.