1099 Contractor

Definition

An independent contractor hired on a project basis rather than as a full-time employee. Startups use them to avoid benefits/taxes, contractors love them for flexibility.

Example Usage

Our design work is done by a 1099 contractor who we found on Upwork and pay per project.

Origin

Named after IRS Form 1099 which reports non-employee income; became common in tech startups in the 1990s

Fun Fact

The IRS is increasingly aggressive about misclassifying employees as 1099 contractors, and it's caused legal problems for some startups.

Source: Employment/Tax Terminology

Related Terms

Beginner

warm introduction

A referral to an investor through a trusted mutual connection, as opposed to cold outreach. The difference between getting a response and having your email automatically archived.

🚀 Startup / VC

Intermediate

dry powder

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.

🚀 Startup / VC

Beginner

Pivot

A strategic change in business direction that's celebrated in Silicon Valley but called failure literally everywhere else. It's the entrepreneurial equivalent of missing your exit on the highway and announcing you meant to take the scenic route.

🚀 Startup / VC

Beginner

entrepreneurial

Having the qualities of someone who starts businesses, takes risks, and believes their idea will totally disrupt an industry despite statistical odds suggesting otherwise. It's the adjective form of optimistic delusion mixed with genuine innovation and an unhealthy comfort with uncertainty. Basically, it describes people who see opportunities where normal humans see reasons to keep their day job.

🚀 Startup / VC

Beginner

VC

Venture Capitalist or Venture Capital—investors who bet on high-risk, high-reward startups in exchange for equity. They're basically professional optimists with other people's money.

🚀 Startup / VC

Intermediate

information rights

Contractual provisions granting investors access to a startup's financial statements, board minutes, and other operational data. Essentially, the legal right to know how badly founders are spending their money.

🚀 Startup / VC

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