Disrupting disruption with disruptive disruptions since 2010.
The mythical J-curve trajectory where metrics stay flat forever and then suddenly shoot straight up, resembling a hockey stick. Every founder claims this is coming; few actually achieve it.
Excess stock options or debt that will dilute existing shareholders, hanging over the cap table like a financial storm cloud. Future pain that everyone pretends isn't there.
The continuous addition of new features to a product beyond its original scope, usually resulting in bloated, confusing software that pleases no one. The disease killing promising MVPs since software began.
Warrants or stock options added as sweetener to a debt deal, giving lenders upside if the company succeeds. Because apparently charging interest isn't enough—they want a piece of the action too.
A term in VC fund agreements where once LPs get their initial investment back, GPs get an accelerated share of profits until their normal split is reached. Basically letting the manager 'catch up' to their 20% after paying back investors.
A clause protecting investors from getting screwed when a company raises money at a lower valuation, automatically giving them more shares to maintain their investment value. Founders hate it; investors demand it.
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.
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 funding round with complex terms beyond simple equity purchase—such as multiple share classes, ratchets, or unusual liquidation preferences. It's what happens when lawyers earn their retainers.
The formal demand from a general partner to limited partners to wire their committed funds, usually with 10-30 days notice and an implied "or else" hanging in the air. It's how venture funds move committed money from promised to deployed.
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.
An investment strategy of making many small bets across a wide portfolio, hoping a few massive winners will compensate for numerous failures—essentially portfolio construction as gambling. The scatter-shot approach favored by funds who believe they can't predict winners.
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.
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.
A schedule requiring founders to earn their equity over time, typically 4 years with a 1-year cliff. The investor-imposed acknowledgment that founding a company doesn't mean you'll stick around to build it.
The unethical practice where brokers excessively trade in a client's account primarily to generate commissions rather than profits, essentially treating your portfolio like a butter-making operation. In SaaS, it refers to the rate at which customers cancel their subscriptions, making it the metric that haunts every startup founder's dreams. Either way, it's excessive activity that benefits someone other than you.
The right to maintain one's ownership percentage in subsequent funding rounds by investing additional capital proportionally. The 'I called dibs' clause of venture capital.
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 investment opportunity sourced exclusively by one firm rather than through competitive process. The venture capital equivalent of finding $20 in your coat pocket—rare, lucky, and probably won't happen again.
A provision requiring existing investors to participate in future funding rounds or lose their special privileges. The venture capital equivalent of 'use it or lose it.'
The hierarchical order in which different classes of investors get paid during an exit, determined by liquidation preferences from multiple funding rounds. It's a legal game of Jenga where common stockholders usually lose.
Rights allowing majority shareholders to force minority shareholders to join in selling the company. Corporate democracy's escape hatch, where your vote doesn't matter if enough people with more shares decide differently.
Additional investment in portfolio companies by existing investors in subsequent rounds. Doubling down on your bets or, less charitably, throwing good money after bad while hoping the first investment wasn't a complete disaster.
A contractual provision that lets majority shareholders force minority investors to join in selling the company, whether they like it or not. Democracy dies in cap tables.