Use this glossary to understand the most important terms used in online business sales, acquisitions, valuations, due diligence, and founder exits.

A

• Acquisition
• Add-Back
• Adjusted Profit
• Annual Recurring Revenue
• Asset Sale

B

• Brand
• Buyer
• Buyer Qualification

C

• Cash at Closing
• Cash Flow
• Churn
• Closing
• Closing Conditions
• Confidential Information Memorandum
• Confidentiality Agreement
• Contribution Margin
• Conversion Rate
• Cross-Selling
• Customer Acquisition Cost
• Customer Concentration
• Customer Lifetime Value
• Customer Retention

D

• Data Room
• Deferred Payment
• Due Diligence

E

• Earn-Out
• EBITDA
• Escrow
• Exclusivity
• Exit
• Exit Readiness
• Exit Strategy

F

• Financial Buyer
• Founder Dependency

G

• Gross Margin
• Gross Merchandise Value

H

• Holdback

I

• Intellectual Property
• Inventory

K

• Key Person Risk

L

• Letter of Intent
• Liquidity

M

• Management Buyout
• Management Team
• Marketing Channel
• Monthly Recurring Revenue

N

• Network Effect
• Non-Compete Agreement

O

• Online Marketplace

P

• Performance Metric
• Platform Risk
• Private Equity
• Proof of Funds
• Purchase Agreement
• Purchase Price

R

• Recurring Revenue
• Representations and Warranties
• Revenue
• Risk

S

• SaaS
• Seller
• Seller Financing
• Seller's Discretionary Earnings
• Share Sale
• Source Code
• Standard Operating Procedure
• Strategic Buyer
• Succession
• Synergy

T

• Take Rate
• Trademark
• Transferability
• Transition Period

V

• Valuation
• Valuation Multiple

W

• Working Capital