Disrupting disruption with disruptive disruptions since 2010.
Veto rights that let preferred shareholders block certain major decisions like selling the company or raising more money. Democracy in theory, oligarchy in practice.
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 information conveyed to the market by investor actions, such as who leads a round or whether insiders participate in follow-ons. In startup land, subtext is text.
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.
The time window (usually 3-5 years) during which a venture fund actively deploys capital into new investments, after which the GP is supposed to stop writing checks and focus on managing the existing portfolio. Think of it as the VC equivalent of last call at the bar.
Term sheet provisions where investor rights decrease as the company hits performance milestones. A way to say 'we trust you more as you prove you're not incompetent.'
A fund agreement clause that allows GPs to reinvest early returns back into new deals rather than distributing them to LPs, extending the fund's effective deployment capacity. A controversial provision that LPs love to scrutinize because it delays their returns.
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.'
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.
A venture fund typically under $50M that invests small checks in very early-stage startups. They offer founder-friendly terms and actual attention, mainly because they can't afford fancy offices or ignore their investments.
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.
A marketing term VCs use to describe their approach, supposedly indicating fair terms and supportive behavior. In practice, it often means 'we won't screw you quite as hard as the other guys.'
The minimum annual return (typically 8%) that limited partners receive before general partners can claim carried interest, functioning as a hurdle rate to ensure LPs get paid first. Think of it as making the GP eat their vegetables before getting dessert.
The exhausting process of pitching multiple venture capital firms on Sand Hill Road in Menlo Park, often receiving similar feedback and soft rejections. It's speed dating for capital, and you're getting ghosted.
Special privileges allowing certain LPs to invest additional money directly into specific portfolio companies alongside the fund, usually with lower or no fees. The VIP backstage pass of venture investing.
A funding round where the company valuation is explicitly set and shares are sold at a specific price per share, unlike convertible instruments that defer pricing. It's the grown-up version of fundraising, with actual valuations and everything.
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.
A capital efficiency metric calculated as net burn divided by net new ARR, measuring how many dollars a company incincinerates to generate each dollar of recurring revenue. A burn multiple under 1.5x suggests efficiency; above 3x suggests a bonfire of investor capital.
The impossible choice between maintaining control of your company and maximizing its financial value, first articulated by Harvard's Noam Wasserman. You can be rich or you can be king, but probably not both.
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.
The magical realm where scientists play God with DNA and investors play roulette with their portfolios. Short for biotechnology, it's the industry that promises to cure cancer, extend your lifespan, and justify obscene R&D budgets—all while burning through cash faster than a lab incinerator. Whether it's CRISPR gene editing or synthetic biology, biotech is where biology meets business and hope meets hype.
Patient, flexible funding that accepts below-market returns to achieve social impact alongside financial returns, pioneered by organizations like Omidyar Network. Capitalism with a conscience, or venture capital with lowered expectations, depending on your perspective.
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.
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.