Disrupting disruption with disruptive disruptions since 2010.
The amount of money a startup is seeking in a funding round. The question that determines whether you're getting a term sheet or eating ramen while applying to jobs.
A situation where a startup with good metrics but bad unit economics keeps raising money from VCs who don't do the math. Also called 'raising on hope and a spreadsheet.'
An Excel spreadsheet that startup founders compulsively update every day to determine exactly when they'll run out of money—a real-time anxiety meter.
The annualized percentage return on invested capital. How investors measure if they actually beat the S&P 500 by betting on your startup.
The phenomenon where your product becomes more valuable as more people use it—the holy grail of startup strategy because it creates defensible moats.
The practice of startups claiming metrics that are wildly inflated—counting beta users as paying customers, or DAU as monthly recurring. It's lying, but with venture capital.
A venture fund's multiple of return—how much capital investors have received back for every dollar they invested. The VC equivalent of 'Did we make money?'
Distributed to Paid-In Capital—the ratio showing how much cash a VC fund has returned to investors relative to what was invested, the only metric VCs care about more than founders' happiness.
Additional revenue from existing customers (upsells, cross-sells, increased usage), the metric investors worship because it supposedly indicates product value and customer satisfaction.
Raising capital because competitors are raising, creating a false sense of urgency and resulting in overvalued rounds where founders convince themselves they're winning when they're actually losing market share.
The date when an employee's stock vesting accelerates, usually one year after they're granted options, when they finally own some shares (until they leave and lose the rest).
The right for existing investors to maintain their ownership percentage by investing in future rounds. It's investor speak for 'we get first dibs on new money.'
Starting with a narrow, focused product in a niche market, then expanding horizontally once you dominate that niche—the startup version of 'start small, think big.'
How much revenue from existing customers you retain (and grow through upsells) versus how much you lose to churn. The metric that determines if you're actually growing.
The average revenue generated per user, typically calculated monthly or annually. The easiest way to understand if your pricing actually matters.
Taking investor money in tranches rather than waiting for a formal funding round close, a practice that sounds efficient but often indicates the fundraising process isn't actually complete.
The panic investors feel when they suspect they're about to miss a hot deal or investment opportunity. The invisible hand that closes funding rounds at 11:59 PM on Friday.
A legal instrument creating a right for investors to purchase equity in a future priced round at favorable terms. Y Combinator's attempt to make early-stage investing 'simple' (it's not).
The sale of existing shares between investors, employees, or founders, rather than new share issuance. The legal way for early employees to cash out without an exit event.
The unofficial group of founders and investors who've experienced a billion-dollar valuation or exit. It's exclusive, pretentious, and they'll definitely mention it.
How you get your product to customers—direct sales, self-serve, partnerships, affiliate networks, etc. Often the secret to success that founders ignore.
A deal term that prevents certain actions without investor approval. The clause that prevents your CEO from going rogue.
A person working inside a VC firm, usually a former founder, between startup gigs. The VC equivalent of being on a really well-paid bench.
A group of experienced people who provide strategic guidance to your startup in exchange for equity and the dubious honor of helping you avoid catastrophic mistakes.