Glossary
Startup terms, in plain English.
52 terms founders meet early on. General information, not legal, tax or investment advice.
- Accelerator
- A time-limited programme that helps a cohort of startups grow, often with mentoring and sometimes funding in return for equity.
- Angel investor
- An individual who invests their own money in early-stage companies.
- ARR / MRR
- Annual or monthly recurring revenue: predictable subscription revenue for a year or a month.
- Bootstrapping
- Growing a business from customer revenue and your own resources instead of outside investment.
- Break-even
- The point where revenue covers all costs, so you neither make nor lose money.
- Burn rate
- How much cash a business spends each month, net of income.
- CAC
- Customer acquisition cost: what you spend on sales and marketing to win one customer.
- Cap table
- A table showing who owns what share of a company.
- Churn
- The share of customers or revenue lost over a period.
- Convertible note / SAFE
- Ways to invest that convert into shares later, usually at the next priced round.
- Corporate tax (UAE)
- Federal tax on business profits. See the knowledge base for the headline rates and official sources.
- Data room
- An organised set of company documents shared with people doing due diligence.
- Due diligence
- Checks an investor, buyer or partner makes before committing.
- Equity
- Ownership in a company, usually as shares.
- Free zone
- A UAE economic zone with its own authority, licences and rules. Compare with mainland in our setup guide.
- Go-to-market (GTM)
- Your plan for reaching and winning customers.
- Gross margin
- Revenue minus the direct cost of delivering it, as a percentage of revenue.
- Incubator
- Support for very early founders. At Startup Roof, physical incubation means booked one-to-one consulting slots at our Al Quoz office, by selection.
- LTV
- Lifetime value: the gross profit you expect from a customer over the whole relationship.
- Mainland licence
- A UAE licence issued by an emirate’s economic department, generally allowing trade across the local market.
- MVP
- Minimum viable product: the smallest offer that lets you learn from real customers.
- Pivot
- A deliberate change of customer, problem or business model based on evidence.
- Pre-seed / Seed
- The earliest outside funding rounds, typically before or around first traction.
- Product-market fit
- When a clear group of customers keeps buying, using and recommending what you sell.
- Runway
- How many months your cash lasts at the current burn rate.
- Term sheet
- A non-binding summary of the main terms of an investment.
- Trade licence
- The licence that lets a UAE business carry out its approved activities.
- Unit economics
- Revenue and costs per customer or unit, showing whether each sale makes money.
- Valuation
- What a company is judged to be worth. Startup Roof does not value companies.
- VAT (UAE)
- Value added tax. See the knowledge base for registration thresholds and official sources.
- Customer acquisition cost (CAC)
- Total sales and marketing spend divided by the number of new customers won in the same period.
- Lifetime value (LTV)
- The gross profit a typical customer is expected to generate over the whole relationship.
- Minimum viable product (MVP)
- The smallest version of a product that lets you learn whether customers value it.
- Dilution
- The reduction in existing owners' percentage when a company issues new shares.
- Vesting
- A schedule over which founders or employees earn their shares or options, often with a cliff.
- ESOP
- Employee share option plan: a pool of shares or options set aside for team members.
- Pre-money valuation
- The value agreed for a company immediately before new investment is added.
- Post-money valuation
- The pre-money valuation plus the new investment.
- Convertible instrument
- Investment that converts into shares later, usually at the next priced round, such as a convertible note or SAFE.
- Pro rata right
- An investor's right to invest in later rounds to keep its ownership percentage.
- Break-even point
- The level of sales at which total revenue equals total costs.
- Working capital
- Current assets minus current liabilities; the cash cushion for day-to-day operations.
- Letter of intent (LOI)
- A document setting out the intended terms of a deal before a full contract is signed.
- Pipeline
- The list of potential customers or deals at each stage before they close.
- Cohort
- A group of startups that join a programme at the same time.
- Demo day
- An event at the end of a programme where startups present to investors and partners.
- Seed round
- An early round of outside funding used to prove the business model.
- Series A
- Usually the first major priced funding round after a company shows traction.
- North star metric
- The single measure that best captures the value customers get from your product.
- Recurring revenue
- Revenue a business expects to receive regularly, such as monthly subscriptions.
- Cash flow forecast
- A month-by-month estimate of cash coming in and going out.
- Founder agreement
- A written agreement between co-founders covering roles, ownership, vesting and what happens if someone leaves.