captive VC

Definition

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.

Example Usage

Taking money from Google Ventures is great until you realize you've got a captive VC on your board when Microsoft wants to acquire you.

Origin

Corporate venture capital terminology, emerged in 1990s as large tech companies launched investment arms

Fun Fact

Startups backed by captive VCs are significantly more likely to be acquired by their investor's parent company—coincidence?

Source: Venture capital industry terminology

Related Terms

Beginner

Disruption

The Silicon Valley term for replacing something that works fine with an app that does the same thing but with a subscription fee. Every startup claims to be disrupting something, the way every toddler claims to be helping with dinner.

🚀 Startup / VC

Advanced

structured round

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.

🚀 Startup / VC

Intermediate

platform value-add

Services and resources VC firms provide beyond capital, such as recruiting help, PR support, or customer introductions. Marketing speak that ranges from genuinely useful to completely fictional.

🚀 Startup / VC

Beginner

Seed Round

The first significant round of funding, where investors plant money in your startup like seeds in a garden, fully expecting that most gardens will produce nothing but weeds and regret. It's typically between $500K and $5M, which is a lot of money for a PowerPoint presentation.

🚀 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

Advanced

overhang

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.

🚀 Startup / VC

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