Someone new to the world of entrepreneurship will notice right away that entrepreneurs have an interesting way of speaking. From “unicorn” to “bootstrapping” to “foodpreneur,” entrepreneurs use a lot of strange language to describe what they do. By combining words, or by assigning new meaning to old ones, they have created a whole new vocabulary to better communicate their needs and ideas in an ever-evolving ecosystem. The EntrepreLingo Series is an effort to fill our readers in on some of the weirder—or less straightforward—terms you’re sure to hear in an entrepreneurial environment. So far, we’ve covered “A” and “B.” This week’s installment is brought to you by the letter “C.”
The most common type of corporation in the U.S., a C Corporation is taxed independently from its owners. Advantages of this class of corporation are limited liability and unlimited growth potential.
A term used to collectively describe a company’s chief officers (CEO, CFO, COO, etc.).
CAC (or CPA, CPC)
Stands for Customer Acquisition Cost (or Cost Per Acquisition, Cost Per Conversion). These three terms ask the same question: How much money does it take to acquire one customer? Your CAC should be less than your CLTV (Customer Lifetime Value).
Cap Table (or Capitalization Table)
This is a list or spreadsheet of your founders’ and investors’ ownership stakes—including equity shares and preferred shares or options—and how much your stakeholders paid for these securities.
Capital is the money your company has available for spending.
A change agent is a person—either internal or external—who helps transform your business by focusing on things like organizational effectiveness, improvement and development. This person has the skill and power to stimulate, facilitate and coordinate change while working alongside key decision-makers in your organization.
Channels (or Distribution Channels, Marketing Channels)
In a nutshell, how you get your goods or services into the hands of the consumer. Types of channels include direct selling, selling through intermediaries and dual distribution.
This is the number of customers who discontinue use of your products or services within a specific time frame, usually each quarter. You can find a helpful tool for calculating your churn rate here.
A cliff is a period of time after which an employee receives stock options or other securities in a company. For example, most startups offer a four-year vesting schedule with a one-year cliff, which means after an employee’s first year, 25% of his or her shares will be vested, with the remaining shares automatically vesting monthly over the course of the next four years. This method is designed to protect companies from employees who leave after a short period of time.
CLTV (or LTV)
Stands for Customer Lifetime Value (or Lifetime Value). This is the net profit that a single customer can provide during a “lifetime” with your company. This value is predicted by the number of transactions your customer is projected to make during their stay (however long) with your company.
A co-working space is an office environment that is shared by several independent companies. These spaces usually feature access to conference rooms, desk space and office equipment. In some cases, they may even provide educational programming, assistance with administrative tasks, and access to mentors and advisors.
Common stock is a security that represents equity ownership in a corporation; these shareholders elect a board of directors and are entitled to the right to vote on management issues at the company’s annual shareholder’s meeting.
Not to be confused with customers, consumers are those who use your company’s product or service.
This is a type of early startup financing wherein a loan is converted into equity at a later date.
Cottage Business (or Cottage Industry)
A small, loosely organized business or industry in which employees work from home using their own equipment.
A combination of the words “crowd” and “outsource,” this is a method of outsourcing that takes advantage of the collective knowledge and efforts of the general public. Crowdsourcing can be used to collect ideas, resources, talent or even funding.
Customers are those who pay for your company’s product or service. Customers may also be consumers, or they may not be.