The Rule of 40 is a SaaS heuristic stating that a healthy SaaS company’s combined growth rate and profit margin should exceed 40%.

Magic Number is a SaaS sales efficiency metric that measures how much new annualised recurring revenue (ARR) a company generates for every dollar spent on Sales and Marketing (S&M) in the prior period.

Dollar-Based Cohort Retention (DBR) is a SaaS analytics framework that tracks revenue retention from a specific cohort of customers (typically grouped by acquisition month or quarter) over time, measured in dollars rather than customer count.

Net Revenue Retention (NRR) — also called Net Dollar Retention (NDR) — is the SaaS metric measuring the percentage of recurring revenue retained from existing customers over a defined period (typically 12 months), including upsell and expansion revenue but excluding new customer acquisition.

Gross Revenue Retention (GRR) is the SaaS metric that measures the percentage of recurring revenue retained from existing customers over a defined period (typically 12 months), excluding any upsell or expansion revenue.

A recapitalization (recap) in VC context is a restructuring of a company’s capital stack — typically conducted when the company is distressed, must raise at a significantly lower valuation (down round), or when existing preferred-stock liquidation preferences create misalignment between common an…

Founder vesting is the standard practice in venture-backed startups whereby founder equity is subject to a vesting schedule — meaning founders technically own shares but the company retains a right to repurchase unvested shares at nominal value if a founder departs.

Single-trigger vesting acceleration is an equity provision under which unvested founder shares or employee options accelerate (vest immediately) upon a single defined event — typically a change-of-control transaction (M&A, IPO) — without requiring any additional condition such as termination of e…

Double-trigger vesting acceleration is an equity provision under which unvested founder shares or employee options accelerate (vest immediately) only upon the occurrence of two distinct conditions — typically (i) a change-of-control transaction (M&A, IPO) AND (ii) involuntary termination without …

Dilution math is the calculation that quantifies how a new equity issuance reduces the ownership percentage of existing shareholders. Every venture funding round dilutes founders, employees, and prior investors as new shares are issued to incoming investors.