Business Terms Glossary | R - ROI

Revenue

Income a company receives from its business activities, usually as a result of the sale of goods or services. Also called turnover or sales. Example: Few problems are more serious for a business than an inability to generate revenue.
Source: www.startupdefinition.com

Right of First Refusal

The right of its holder to buy or invest in a company before the owner of the company is entitled to enter into the same transaction with a third party. Example: We want to sell our business to Apple, but we have to talk to Google first because they have a right of first refusal.
Source: www.startupdefinition.com

ROI - Return On Investment

A measure of performance that is used to evaluate or compare the efficiency of a use of capital. It is typically calculated as net profit / investment.
Example: The return on investment of data-driven marketing can often be over 10X.
Source: www.startupdefinition.com

Run Rate

The result of extrapolating the current period's financial results over a longer period of time. Most often used in the context of extrapolating the current month into an annual number by multiplying by twelve.
Example: The startup reported that it grew rapidly to finish the year at a €10 million run rate.
Source: www.startupdefinition.com

Runway

The amount of time until your startup goes out of business, assuming your current income and expenses stay constant. Typically calculated by dividing the current cash position by the current monthly burn rate.
Example: After raising another €50 million, our company now has enough runway to last us through the heat death of the universe.
Source: www.startupdefinition.com