WTF is CAC? And More Buzzwords Unpacked
Let's decode the buzzwords Chad learned at Harvard.
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Let’s get one thing straight: If you don’t know what CAC or TAM means, it doesn’t mean you’re not brilliant or capable, it means no one ever bothered to explain the vocabulary of a world intentionally shrouded in insider speak. This guide is here to help you translate the shorthand of pitch decks and investor calls into clear, accessible language—not because you can’t understand it, but because you shouldn’t have to decode it alone.
Whether you’re building your first deck, raising your first round, or just want to hold your own in a room full of startup-speak, here’s your go-to glossary for talking the talk (and walking it even better).
CAC (Customer Acquisition Cost)
What Chad says: “We need to get our CAC under $100 or the model breaks.”
What it actually means: How much you spend to get one new customer. Think: ad spend, marketing salaries, sales calls—all rolled up and divided by how many customers you landed.
Why you should care: If you’re spending $200 to get a $50 customer, that’s not growth, it’s financial sabotage.
LTV (Lifetime Value)
What Chad says: “Our LTV to CAC ratio is off the charts.”
What it actually means: How much money one customer brings in over time. The holy grail is high LTV and low CAC.
Why you should care: If your customers come back (and spend), you’ve got a real business. If not, you’ve got a one-hit wonder.
Runway
What Chad says: “We’ve got 12 months of runway left.”
What it actually means: How long your business can survive before you run out of money.
Why you should care: It’s the financial clock ticking on your dream. Stay calm. But maybe cancel the second office plant.
Burn Rate
What Chad says: “We’re burning $50K a month to accelerate growth.”
What it actually means: How much cash your business is spending every month.
Why you should care: High burn with no plan = the startup equivalent of lighting money on fire.
TAM (Total Addressable Market)
What Chad says: “The TAM for this space is $30 billion.”
What it actually means: The total market demand for your product or service—if every single person who could buy from you actually did.
Why you should care: Investors love big TAMs. But realistic targets > inflated dreams.
Run Rate
What Chad says: “We’re at a $2M run rate.”
What it actually means: How much you would make in a year if you kept up this month’s revenue.
Why you should care: It’s a projection, not a promise. And sometimes, it's just math cosplay.
Churn
What Chad says: “Our churn is under 5%.”
What it actually means: The percentage of customers who stop using your product or service over a certain period.
Why you should care: If people keep leaving, you’re refilling a leaky bucket.
ARR/MRR (Annual/Monthly Recurring Revenue)
What Chad says: “Our MRR is up 30% this quarter.”
What it actually means: The predictable money you make monthly or yearly from subscriptions or ongoing services.
Why you should care: Consistency is sexy. And easier to forecast.
Resources
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