Part 1: Starting Up
Part 2: Growth
Part 3: Scaling Up
Here is a glossary of key terms used in this course.
- Accounts Payable – money you owe for products and services already received
- Accounts Receivable – money owed to you for products/services already delivered
- Angel Investor – a private high net worth individual who will invest money in medium or high potential ventures in exchange for percentage ownership in a company
- Appreciating Asset: something you own that is going up in value
- Appreciation – increase in value over time
- Asset: something you own that has value
- Balance Sheet Formula – assets minus liabilities equal owners’ equity
- Balance Sheet: a financial statement that keeps track of assets, liabilities, and owners’ equity.
- Bond – debt instrument through with companies and governments can raise money
- CAC – Customer acquisiton cost: The amount you pay in advertising costs to acquire a new customer
- Cash Flow – the in and out of money to/from your business
- Cash Flow Statement – a financial statement that keeps track of all the money that goes in and out of your business.
- Churn – The rate of customer cancellation
- COGS – the cost of goods sold. What you pay for what you sell.
- Depreciating Asset: something you own that is going down in value
- Depreciation – reduction in value over time
- EBITDA – earnings before interest, taxes, depreciation, and amortization
- Equity – ownership in a company
- Expenses – what you spend
- Gross Income – Total revenue minus COGS
- Gross Margin – same as gross income
- Income Statement – a financial statement that keeps track of revenue, expenses, and profit.
- Income Statement Formula – Revenue minus expenses equals net profit.
- IPO – initial public offering, selling part of your company on the stock market in exchange for investment capital in your business
- Liability: something you owe for
- LTV – Lifetime value: The total expected revenue from a customer during the term of that customer being a customer
- Net Income – same as net profit
- Net Profit – Total revenue minus total expenses
- Option pool – a percentage ownership in your company set aside at founding for those who may come aboard later.
- Owners’ Equity: The value of what the shareholders/owners have put into a company
- Revenue – what you earn
- Venture Capital – investment money raised from firms that invest in high potential ventures in exchange for percentage ownership in a company
- Vesting – earning equity over time instead of all at once