ARR

Definition

Annual Recurring Revenue -- the amount of subscription money a company expects to collect over a year, assuming nobody cancels, which they will. It's the startup metric most likely to appear in fundraising decks and least likely to match reality.

Example Usage

"Our ARR is $5 million, which is technically true if you annualize last Tuesday, which was our best day ever and will never happen again."

Related Terms

Intermediate

down-stack

Moving to build or sell products at a lower layer of the technology infrastructure, typically where margins are thinner but the market is larger. Often happens when companies realize their original niche is too small.

🚀 Startup / VC

Intermediate

conversion rights

The privilege granted to preferred shareholders to convert their fancy preferred stock into common stock, typically exercised when they want to sell or when common stock becomes more valuable (rare but delightful). It's a one-way ticket that investors usually only take when they're confident they're not leaving money on the table.

🚀 Startup / VC

Advanced

breaking the syndicate

When a startup seeks a lead investor for their next round who isn't part of their existing investor group, potentially signaling problems or a desire for fresh perspectives. It's the venture capital equivalent of changing friend groups.

🚀 Startup / VC

Advanced

anti-dilution protection

A clause protecting investors from getting screwed when a company raises money at a lower valuation, automatically giving them more shares to maintain their investment value. Founders hate it; investors demand it.

🚀 Startup / VC

Intermediate

hotbed

An environment so ripe for growth and innovation (or chaos) that ideas, startups, or scandals practically germinate themselves. Think of it as nature's incubator, except with better heating and fewer regulatory compliance issues.

🚀 Startup / VC

Intermediate

tooling

Shaping materials with specialized equipment, or—in startup-speak—'getting the factory ready before we realize we can't afford it.' The expensive setup phase nobody budgets correctly for.

🚀 Startup / VC

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