Cost Center
Noun · Startup & VC
Definitions
A part of the organization that incurs costs but is not directly measured as generating revenue, such as legal, IT, or internal tooling. Calling something a cost center affects budgeting and power dynamics.
In plain English: A part of the company seen mainly as costing money rather than bringing revenue in directly.
Example: "Security was treated like a cost center until the first serious compliance deal."
Related Terms
- CRM
- Dead Cat Bounce
- ERP
- Escrow
- Fixed Cost
- Forecasting
- Free Cash Flow
- G&A
- Governance
- Growth Capital
- Holding Company
- Investor Relations
- Liquidation
- Liquidity
- Aftermarket
- Asset-Light
- Base Case
- Blended Rate
- Break-Even
- Business Unit
- C-Level
- Capital Efficiency
- Operating Expense
- Operating Model
- Operational Excellence
- Payback Period
- Primary Market
- Profit Center
- Public Offering
- Risk Capital
- Sales Ops
- Secondment
- Utilization Rate
- Virtual CFO
- Working Capital