Startup Glossary: Letter "C"

CAC (Customer Acquisition Cost) is the total cost required to acquire a new customer, including all sales and marketing expenses.

The CAC Payback Period is the number of months required for a startup to generate enough gross margin from a customer to recover its Customer Acquisition Cost.

A Cap Table (Capitalization Table) is a detailed spreadsheet or ledger that outlines a startup's equity ownership structure.

Cap Table Dilution refers to the reduction in existing shareholders' equity ownership percentage caused by the issuance of new stock, option pool expansions, or conversion of SAFE notes.

A Capital Account is a ledger account tracking the capital contributions, share of profits, and distributions of an individual partner in a venture capital fund.

A Capital Call (or drawdown) is the process by which a venture capital firm requests its Limited Partners to transfer a portion of their committed capital to fund an investment or cover fees.

A Capital Drawdown is the actual transfer of committed capital from a fund's investors (LPs) to the fund managers (GPs) following a capital call.

Capital Expenditure (CapEx) represents the cash spent by a startup to acquire, upgrade, and maintain physical assets like servers, office spaces, or machinery.

Capital Gains Tax is the tax levied on profits realized from the sale of non-inventory assets like startup shares and equity investments.

Carried Interest (or carry) is a share of the profits of a venture capital fund that is paid to the fund managers (GPs) as performance compensation.

Cash Accounting is an accounting method where revenues and expenses are recorded only when cash is actually received or paid.

Churn ARR is the loss of Annual Recurring Revenue resulting from existing customers canceling their subscriptions entirely.

Churn Rate is the percentage of customers or subscription revenue that a startup loses over a specified period.

A Clawback Provision is a legal clause in a venture capital fund agreement requiring the fund managers (GPs) to return excess carried interest if subsequent investments underperform.

A Cliff is a specific period at the beginning of a vesting schedule during which no equity is earned.

Co-Investment is a direct investment made by a fund's Limited Partners alongside the General Partner in a specific portfolio company, typically bypass fund fees.

Co-Sale Rights (also known as tag-along rights) allow investors to participate pro-rata in any stock sale initiated by a founder or major shareholder to a third party.

Cohort Analysis is the study of customer groups who share common characteristics (such as signup date) to track behavior and retention trends over time.

Cold Outreach is the practice of contacting prospective investors or customers directly without a prior relationship or referral.

Collections are the actual cash receipts received from customers paying their outstanding invoices.

Common Stock is the primary class of equity ownership in a startup, typically held by founders, employees, and advisors.

Contraction ARR is the reduction in Annual Recurring Revenue from existing customers who downgrade their subscriptions without churning completely.

Contribution Margin Ratio is the percentage of revenue remaining after subtracting variable costs, showing the capital available to cover fixed expenses.

A Conversion Discount is a clause in convertible securities granting early investors a percentage discount on share prices in future priced rounds.

A Convertible Note is a debt instrument that converts into equity at a future date, typically in connection with a priced funding round.

Corporate Governance Guidelines are the policies and practices that outline the authority, responsibilities, and decision-making structures of a startup's board and management.

Corporate Venture Capital (CVC) is the practice of large companies investing corporate funds directly into startup companies, often for strategic or synergy-driven goals.

Cost of Goods Sold (COGS) represents the direct costs associated with delivering a startup's software or services to its customers.

A Cram Down is an extreme down round where the startup's valuation is reduced so severely that the ownership stakes of previous investors and founders are heavily diluted or practically wiped out.

Cross-Selling is a sales technique where a customer is encouraged to purchase complementary or related products alongside their current subscription.

Customer Churn is the complete cancellation of a subscription or service agreement by an active customer account.

Customer Effort Score (CES) is a metric measuring the ease with which customers can interact with a startup's product, support team, or onboarding flow.

The Customer Journey is the complete series of interactions and experiences a customer goes through when engaging with a startup's brand, product, or service.

Customer Onboarding is the structured process of guiding new users through setup, training, and initial configurations to help them adopt a product.

Customer Retention Rate (CRR) measures the percentage of active customers a startup maintains over a specific period, showing customer loyalty.

Customer Satisfaction (CSAT) is a metric measuring how satisfied customers are with a specific product feature, support interaction, or service transaction.

Customer Success is an operational strategy focused on proactively helping customers achieve their desired goals using your product, driving retention and expansion.