SAAS (Software as a Service)

Definition

Cloud-based software customers pay for monthly/yearly as subscriptions instead of licensing, the dominant startup business model.

Example Usage

We converted from perpetual licenses to a SaaS model and immediately improved cash flow predictability.

Origin

Technology industry terminology, popularized late 1990s

Fun Fact

SaaS companies trade recurring revenue for lower upfront margins but better lifetime value

Source: Standard technology terminology

Related Terms

Beginner

Iterate

To make small, incremental improvements to something, which is a sophisticated way of saying "it's not done but we're shipping it anyway." The philosophy of iterate fast, break things has broken many things and iterated on surprisingly few.

💻 Tech / IT🚀 Startup / VC

Intermediate

deployment pace

The speed at which a VC fund invests its committed capital. Deploy too fast and you look desperate; too slow and your LPs wonder if you can actually find deals.

🚀 Startup / VC

Intermediate

LP (Limited Partner)

Institutions or individuals who invest capital into VC funds. The people whose retirement money is being gambled on whether your app will work.

🚀 Startup / VC

Advanced

Due Diligence (Technical)

The engineering audit where technical experts examine your code, architecture, and tech debt to see if you're about to implode.

🚀 Startup / VC

Beginner

transaction

Any exchange of goods, services, or money, elevated to sound more important when preceded by 'business' or followed by 'cost.' In startup world, it's the holy grail metric that proves people are actually using your product for its intended purpose rather than just kicking the tires. VCs obsess over transaction volume, transaction value, and transaction frequency as if counting exchanges of value will somehow predict the future.

🚀 Startup / VC

Advanced

carried interest

The VC's cut of investment profits, typically 20% of gains above a certain return threshold. How general partners get rich while limited partners provide the actual money—the ultimate performance fee.

🚀 Startup / VC

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