Accounting Glossary - Mighty Startup

409a valuation

A 409A valuation, also known as a Section 409A valuation, is a specific type of appraisal or valuation performed

Accredited Investor

An accredited investor is an individual or entity that meets certain financial criteria set by securities regulators, wh

Amortization

Amortization is the process of spreading out the cost of an expense or an investment over a period of time.

Angel Investor

An angel investor, often referred to simply as an “angel,” is an individual who provides

Annual Contract Value (ACV)

Annual Contract Value (ACV) is an average annual value from each contract. It’s basically your revenue per contract.

Annual Run Rate Revenue (ARRR)

ARRR is ARR plus income that isn’t assigned to a recurring subscription.

ARR

ARR is a fundamental business metric for subscription-based companies.

Average Customer Life (ACL)

The duration of the relationship between a customer and the company.

Average Revenue Per User (ARPU)

Average Revenue Per User (ARPU) is a metric used by companies to measure how much revenue they are generating.

Balance Sheet

A balance sheet is one of the three primary financial statements used to assess a company’s financial health and its fin

Billings

The term “billings” is the total amount of customer invoices or bills generated by a company during a specific period…

Bookings

The term “bookings” is the value of confirmed orders or sales made by a company during a specific period.

Bookkeeping

Bookkeeping is the process of recording, organizing, and maintaining a systematic and accurate record of a company’s…

Burn multiple

A burn multiple is a relatively new capital efficiency metric

Burn Rate

Burn Rate is the rate at which a company is spending its cash reserves to fund its operations.

Capital Expenditures (CapEx)

Capital expenditures, often abbreviated as CapEx, are funds that a company or organization spends to acquire

Chart of Accounts

Chart of Accounts is a structured list of all the accounts used to record financial transactions within an organization.

Churn

Churn, in a business context, refers to the rate at which customers or subscribers discontinue their

Cohort Analysis

Cohort Analysis is a type of analysis that groups customers or users based on a specific characteristic…

Contribution Margin

Contribution margin is a financial metric that represents the profitability of a product, service, or business segment.

Finance & Accounting Glossary