Glossary

A/B testing is a method of comparing two versions of a webpage or other marketing asset to determine which one performs better. It's used to optimise websites and marketing strategies based on data-driven decisions.

An abandoned cart refers to a scenario where online shoppers add items to their shopping carts but leave the site without completing the purchase. This is a significant issue in e-commerce, leading to lost sales and reflecting potential issues with the user experience or pricing.

Affiliate marketing is a performance-based marketing strategy where a business pays external partners, known as affiliates, for each visitor or customer brought by the affiliate's marketing efforts. It's a cost-effective approach to increase brand awareness and sales.

Agile development is a method of software development which involves dividing tasks into short phases of work, with frequent reassessment and adaptation of plans. It's designed to be flexible and improve productivity.

Angels are individuals who provide funding and mentorship to startups in exchange for equity. They often bring industry expertise, networks, and guidance to early-stage companies, supporting their growth and development.

ARR is the annualised revenue that a company expects to receive from its customers for providing certain services or products. It's particularly relevant in subscription-based businesses, where customers pay on a recurring basis.

An API is a set of rules and protocols for building and interacting with software applications. APIs dictate how software components should interact and allow different software systems to communicate with each other.

Acquihire is a term used to describe an acquisition primarily driven by the interest in acquiring talented individuals from the target company. Instead of focusing on the company's products or services, the acquiring company is more interested in assimilating the skills, expertise, and experience of the target company's employees.

An asset sale refers to a transaction where the company sells specific assets, such as intellectual property, software licenses, or technology infrastructure, rather than selling the entire business entity. This strategic move allows the company to divest certain assets while retaining other core components, enabling it to focus on its core competencies or pivot its business strategy.

A bad leaver is an employee or founder who leaves a company under unfavourable circumstances, such as termination or breaching employment agreements. This designation typically results in the forfeiture or diminished value of their equity or ownership rights.

A bill of materials (BOM) is a comprehensive list of components, parts, and raw materials required to manufacture a product. It provides a detailed breakdown of the necessary items and quantities needed for production.

Bonded warehouses are secured storage facilities where imported goods can be stored before paying customs duties or taxes. They allow businesses to defer import duties and taxes until the goods are sold or leave the warehouse, facilitating international trade and customs compliance.

Bootstrapping is the process of building and funding a business from personal finances or from the operating revenues of the new company. It allows entrepreneurs to maintain more control but can slow down growth due to limited funds.

Bounce rate is the percentage of visitors who navigate away from your website after viewing only one page. A high bounce rate can indicate that a site's landing page isn't relevant to visitors.

Breakeven refers to the point at which a company's revenue equals its total costs, resulting in neither profit nor loss. It represents the minimum level of sales or operations required for a business to cover all its expenses.

B2B2C refers to transactions that involve both business-to-business (B2B) and business-to-consumer (B2C) relationships. Here, a business provides products or services to another business that directly interfaces with consumers.

B2B refers to business transactions that occur between two companies, as opposed to a direct consumer. It involves the sale of products, services, or solutions from one business to another, catering to the specific needs and requirements of business customers.

B2C refers to business transactions that occur between a business and an individual consumer. It involves the sale of products or services directly to end consumers, targeting their preferences and addressing their personal needs.

A cap table is a spreadsheet or table that shows the equity capitalisation for a company, including the percentage of ownership, equity value, and dilution over time. It provides a clear picture of ownership stakes and equity dilution.

Cash burn, or burn rate, refers to the rate at which a company spends (or burns) its available cash over a specific period. It indicates the net amount of cash being utilised by the business to cover operating expenses, investments, and other cash outflows. It's crucial for start-ups to manage their burn rate to make sure they don't run out of cash before more funding or becoming profitable.

A chargeback occurs when a customer disputes a charge from a business with their credit card issuer. It's meant to protect consumers from fraudulent transactions, but can lead to significant costs for businesses due to associated fees and potential loss of goods sold.

A chart of accounts (CoA) is a structured list of all the individual financial accounts used by a business to record its financial transactions. It serves as a comprehensive framework that categorises and organises various types of financial activities, such as assets, liabilities, revenue, expenses, and equity. The chart of accounts provides a standardised system for classifying financial information, facilitating accurate bookkeeping, financial reporting, and analysis. Each account is assigned a unique code or number to ensure consistency and ease of reference when recording and analysing financial data.

Churn rate is a business metric that measures the rate at which customers stop subscribing to or using a product or service over a given period. It is typically expressed as a percentage and is used to assess customer retention and loyalty. In the SaaS and e-commerce sectors, churn rate helps businesses understand the effectiveness of their offerings, customer satisfaction levels, and the need for customer retention strategies.

Click-through rate (CTR) is a metric that measures the number of clicks digital ads receive per number of impressions. It's a key indicator of the effectiveness of digital advertising campaigns.

Clicked sales refer to sales generated through online adverts or links that users click on. They're typically tracked through web analytics or affiliate marketing platforms, allowing businesses to measure the effectiveness of their online marketing efforts.