Startup Glossary: Letter "N"
Explore definitions, key metrics, legal terms, and financing mechanics shaping the startup ecosystem.
N
NDA
An NDA (Non-Disclosure Agreement) is a legally binding contract that restricts parties from sharing confidential information disclosed during discussions.
Net Asset Value
Net Asset Value (NAV) is the estimated total market value of a venture capital fund's assets minus its liabilities, representing the net equity of the fund.
Net Burn
Net Burn is the actual cash loss a startup incurs each month, representing the difference between Gross Burn and cash collections from sales.
Net Churn
Net Churn is the net change in recurring revenue from the existing customer base, factoring in both revenue losses (churn and contraction) and gains (expansions).
Net Churn Rate
Net Churn Rate is the net percentage of recurring revenue lost over a period, factoring in expansions and upgrades from existing customers.
Net Income
Net Income is a startup's total profit after subtracting all operating expenses, COGS, interest, taxes, and depreciation from total revenues.
Net Margin
Net Margin (or net profit margin) is the ratio of net profits to total revenues, showing how much of each dollar earned translates into actual profit.
Net New ARR
Net New ARR is the net change in Annual Recurring Revenue over a period, factoring in new customer acquisitions, expansions, contractions, and churn.
Net Payment Terms
Net Payment Terms are contract clauses specifying the number of days a customer has to pay an invoice after it is issued (e.g. Net 30).
Net Promoter Score
Net Promoter Score (NPS) is a customer loyalty metric that measures how likely users are to recommend a startup's product or service to others.
Net Revenue Retention
Net Revenue Retention (NRR) measures the percentage of recurring revenue retained from existing customers over a period, including upgrades and expansions but excluding new sales.
Net Working Capital
Net Working Capital is the difference between a startup's current assets and current liabilities, measuring short-term operational liquidity.
Network Effects
Network Effects occur when a product or service becomes more valuable to its users as more people use it.
Non-Participating Preferred Stock
Non-Participating Preferred Stock is a class of equity that gives investors the choice of receiving either their liquidation preference or converting their shares to common stock.
Non-Qualified Stock Options
Non-Qualified Stock Options (NSOs) are standard stock options that do not qualify for special IRS tax treatment, taxed upon exercise and sale.