The standard · version 1.1.0 · 15 November 2026
The terms a deck's numbers are read by. Where a deck prints how its own figure was worked out, that is the definition the figure is read by.
Recurring subscription or usage revenue invoiced and paid under a signed contract, stated as an annual run-rate.
A recurring line invoiced but unpaid at the as-at date.
Signed, with a start date in the future or the first invoice not yet raised.
Fees for time-boxed pilots and trials.
Implementation, onboarding and integration fees.
Consulting and custom work.
Changes to a live line's annual value: more seats, a new module, a reduction.
A recurring line that ends without a renewal row. Counted the month after the end date.
Opening ARR less churn and contraction over twelve months, divided by opening ARR. Investors look for 90% or more by Series A.
Opening ARR plus expansion less contraction and churn, divided by opening ARR. 100% or more by Series A.
A verbal yes, a letter of intent or a proposal under review is pipeline, not revenue.
Annual Recurring Revenue (ARR) is the standard for SaaS companies that sell annual subscription contracts, or Monthly Recurring Revenue (MRR) for those selling monthly subscriptions. If your company sells both, choose the metric that represents the majority of revenue. ARR is always 12 x MRR. Note the requirement that the contract is “recurring” (ongoing); one-time revenue, such as for professional services or pilots, does not count towards MRR or ARR.
Gross Margin reflects a company’s margin after subtracting the cost of goods sold (COGS) from revenue. For SaaS companies, COGS typically consist of hosting costs, any data or software needed for the product to operate, and the cost of frontline operations.
Customer Acquisition Cost (CAC) divides S&M expense in the preceding period (month or quarter) by the number of new customers in the current period.
Customer acquisition cost or CAC should be the full cost of acquiring users, stated on a per user basis.
To determine how many months it takes for a customer to produce enough gross profit to pay back its CAC, divide S&M spend by MRR x Gross Margin.
Lifetime Value (LTV) is the cumulative gross profit contribution, net of CAC, of the average customer in a cohort.
SVV's own definitions (source Sure Valley Ventures 2026) were written for companies that sign contracts and send invoices. For a product bought self-serve and paid by card, by the month or by usage:
SVV's material does not define gross margin, CAC, CAC payback or lifetime value. The definitions of them above are published ones, quoted exactly. Investors work these out in more than one way, so they are a reference and not a rule. Where a slide prints how its figure was worked out, the figure is defined: say so, and say where its working differs from the definition here. That SVV's material lacks a term is never a fault of the deck.
A retention figure for less than twelve months, labelled with its period, is the same measure over a shorter time, not a different definition.