Glossary essentials
The core financial terms used throughout Radley Finance, in plain language.
Glossary essentials
| Term | Definition |
|---|---|
| MRR / ARR | Monthly / Annual Recurring Revenue (ARR = MRR × 12). |
| ARPU / ARPA | Average Revenue Per User / Account. |
| Churn rate | Percentage of customers (or revenue) lost in a period. Monthly churn compounds: 5% monthly ≈ 46% annually. |
| NRR | Net Revenue Retention — existing-customer revenue after churn, downgrades, and expansion. >100% = growth without new customers. |
| LTV | Lifetime Value = (ARPU × Gross Margin) ÷ Churn Rate. |
| CAC | Customer Acquisition Cost = total acquisition spend ÷ new customers. |
| LTV:CAC | Healthy target is 3:1 or better. |
| CAC payback | Months to recover CAC = CAC ÷ (ARPU × Gross Margin). Under 12 months is strong. |
| Gross margin | (Revenue − COGS) ÷ Revenue. SaaS target: 70–85%. |
| Burn rate / runway | Monthly net cash outflow / months of cash left. Investors expect 18–24 months post-raise. |
| T2D3 | VC growth shorthand: Triple, Triple, Double, Double, Double — all companies decelerate. |
| Pre/post-money | Company value before / after new investment (post = pre + amount raised). |