Disrupting disruption with disruptive disruptions since 2010.
The privilege granted to preferred shareholders to convert their fancy preferred stock into common stock, typically exercised when they want to sell or when common stock becomes more valuable (rare but delightful). It's a one-way ticket that investors usually only take when they're confident they're not leaving money on the table.
The total revenue you expect from one customer during their entire relationship with your company—usually wildly overestimated.
A funding round where only existing investors participate, with no new outside investors joining. It's either a vote of confidence from believers or a sign that no one else wanted in.
Startups built on fundamental scientific breakthroughs rather than clever software—the kind of company that requires physics PhDs and takes 10 years to become profitable, beloved by investors who want long-term moonshots.
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.
A shareholder who has contractual rights to approve or block an acquisition or IPO, giving them veto power over exit decisions regardless of ownership percentage. Democracy in action, if democracy meant a small group could overrule the majority.
A financing or exit event that triggers specific contractual provisions in a term sheet, such as conversion of convertible notes or acceleration of vesting. The legal trip-wire that determines when various startup agreements activate.
A non-binding document outlining the key terms of an investment deal—think of it as a letter of intent that's about as reliable as a Tinder profile. The real fun begins when lawyers turn these bullet points into a 60-page agreement.
A startup that returns an entire venture fund's value through a single investment, making every other deal in the portfolio irrelevant. Rarer than unicorns and more impactful than a hundred modest successes combined.
A VC who claims they'll actively help your company through connections, advice, and support, as opposed to just wiring money. Reality: they'll make three intros, attend two board meetings, then ghost you unless you're a unicorn.
Acronym for product-market fit, used by people too busy crushing it to say three whole words. It's the startup world's obsession with abbreviations meeting their obsession with the only metric that actually matters.
When investors, customers, or acquirers proactively reach out to a startup rather than being solicited. It's the entrepreneurial equivalent of being asked to the dance instead of doing the asking.
The handful of key performance indicators that actually determine business health versus the vanity metrics founders cite in pitch meetings. Revenue and retention versus social media followers and press mentions.
A startup valued at over $1 billion that has never undergone the reality check of going public or getting acquired. Their unicorn status exists purely in the fantasy land of private market valuations.
The romanticized art of starting businesses, taking risks, and pretending to enjoy working 80-hour weeks for the slim chance of eventual success. It's capitalism's version of the hero's journey, complete with failure, redemption arcs, and way too many LinkedIn posts about "grinding." Business schools teach it, VCs fund it, and most people quit it within three years.
The most aggressive anti-dilution protection where early investors' conversion price adjusts to match a down round price, regardless of how small the down round is. Financial punishment for daring to need more money.
A mechanical advantage device that pivots on a fulcrum to multiply force, or in startup parlance, anything you can use to do more with less. Every MBA in Silicon Valley thinks they've found a "lever" to pull, usually right before asking for $5M in seed funding. Physics teachers hate how loosely VCs use this term, but hey, at least someone's paying attention to simple machines.
The VC firm that sets the terms and does the heavy lifting in a funding round, while other investors gratefully follow along. Someone has to negotiate while everyone else free-rides.
Contract provisions allowing investors to force the company to buy back their shares after a certain period, typically if there's no exit. A rarely exercised nuclear option that reminds founders who really has the power.
The total value returned to investors divided by the total amount invested, ignoring time. It's the simple, honest metric that tells you whether you made or lost money, period.
The revenue and costs associated with a single customer or transaction, supposedly proving your business model works before you scale. Often the awkward math that reveals you lose money on every sale but plan to make it up in volume.
Unspent capital sitting in a VC fund, waiting to be deployed into investments. The ammunition that lets VCs act fast when hot deals emerge or support portfolio companies needing emergency cash.
The VC expectation that founders will make introductions, provide advice, and help other portfolio companies in exchange for investment and support. Networking as a contractual obligation.
The pattern where a venture fund initially shows negative returns as it deploys capital and pays fees, before (hopefully) shooting upward when investments exit. A graph that looks like the letter J, assuming your fund doesn't remain in the vertical downstroke forever.