Disrupting disruption with disruptive disruptions since 2010.
A provision allowing limited partners to reclaim previously distributed carried interest from GPs if later losses reduce overall fund returns. The nightmare scenario keeping fund managers up at night.
A venture capital fund owned and operated by a larger corporation to invest in strategically relevant startups. They bring money and potential acquisition interest, but everyone knows who they're really working for.
Verbal commitments from investors to participate in a round that aren't legally binding, giving founders a sense of momentum that may evaporate when term sheets arrive. It's Schrödinger's capital raise.
The company valuation publicly announced or reported in the press, which may differ from the effective valuation once liquidation preferences and other terms are factored in. It's the Instagram filter for startup valuations.
The cultural expectation in startup ecosystems that successful entrepreneurs and investors should help newcomers, supposedly creating a virtuous cycle. In practice, it's often networking disguised as altruism.
When a startup raises funding from institutional VCs after initially bootstrapping or taking only angel money. It's like moving from community college to the Ivy League, complete with higher expectations.
The exhaustion investors feel after reviewing hundreds of pitch decks that all blur together with the same buzzwords and hockey stick projections. It's why your 'revolutionary AI blockchain solution' makes their eyes glaze over.
An entrepreneur who returns to start another company after their previous venture was acquired or failed. They're either gluttons for punishment or genuinely addicted to the startup lifestyle.
Late-stage debt or hybrid securities used to bridge the gap between venture rounds and an exit. It's called mezzanine because it sits between the ground floor (equity) and penthouse (IPO).
Simple Agreement for Future Equity—a Y Combinator innovation that lets startups take money now and figure out the valuation later. 'Simple' is debatable; some lawyers call them 'complex convertible debt without the debt.'
A startup that a VC firm has invested in, now living in their collection like a Pokémon card. Each firm has dozens, knowing most will fail but hoping one becomes a legendary holographic Charizard.
Additional money invested in a portfolio company after the initial round—either because things are going great and you want more ownership, or things are terrible and you're protecting your original investment. Hope and desperation look surprisingly similar.
The corporate fantasy of growing a business exponentially while somehow maintaining quality, usually uttered right before everything falls apart. It's the process of increasing capacity to handle growth—or in startup speak, the thing you'll figure out later after raising millions in VC funding. In tech, it means making systems handle more users; in reality, it means discovering all the shortcuts you took when building the foundation.
The danger that passing on an investment or accepting certain terms sends negative messages to future investors. In VC, optics matter as much as economics—sometimes you reject money because taking it would look desperate.
A go-to-market strategy where the product itself drives customer acquisition, retention, and expansion rather than traditional sales teams. Users fall in love before ever talking to a salesperson.
A product development organization obsessed with shipping features rather than solving customer problems or delivering value. The startup equivalent of a hamster wheel—lots of motion, no actual progress.
A financing round where new investors impose harsh terms on existing shareholders who lack the votes to block it. It's democracy in action, if democracy meant 'whoever has the most money wins.'
An IRS-mandated appraisal of your company's common stock price, required so employees don't accidentally commit tax fraud when exercising options. It's always mysteriously lower than what you tell investors your company is worth.
Financial projections showing what a company's metrics would look like under hypothetical conditions or future scenarios. Latin for 'as a matter of form,' startup-ese for 'this is the fantasy we're selling investors.'
The VC's cut of investment profits, typically 20% of gains above a certain return threshold. How general partners get rich while limited partners provide the actual money—the ultimate performance fee.
IRS tax designation (Section 1202) that can exclude up to $10 million in gains from federal taxes for early startup investors, assuming you navigate the Byzantine requirements. The tax break that makes angel investing slightly less insane.
An experienced executive or advisor brought into a startup to add operational credibility and grown-up supervision to a young founding team. Think adult daycare, but for unicorn hopefuls.
Reserved portion of an acquisition's proceeds specifically allocated to employees or specific shareholders, ensuring they benefit even if the waterfall would otherwise drown them. Exit sharing mandated by negotiation or generosity.
Building a company with personal savings, credit cards, and stress ulcers instead of venture capital—either a badge of honor or an excuse for slow growth, depending on your exit results. It's entrepreneurship on hard mode.