cram down

Definition

A financing round where new investors impose unfavorable terms on existing shareholders who lack the power to block it. Essentially a hostile takeover by people already inside your building.

Example Usage

The Series C was a brutal cram down that wiped out most of the common shareholders' equity and restructured the board entirely.

Origin

Bankruptcy law terminology adapted to venture finance, referring to forcing terms on dissenting parties

Fun Fact

Cram downs often happen when a company is desperate enough that the only alternative is complete failure, making resistance futile regardless of rights.

Source: Venture capital financing terminology

Related Terms

Intermediate

exit

In startup land, the glorious moment when founders and investors finally cash out, either through acquisition or IPO, turning years of ramen dinners and sleepless nights into actual money. It's the entrepreneurial equivalent of winning the lottery, except you had to build the lottery first. Every VC's favorite word and every founder's obsession after their Series A.

🚀 Startup / VC

Intermediate

rolling fund

A venture fund structure where capital commitments are made quarterly rather than in one large closing, allowing GPs to start investing immediately. The subscription model comes to venture capital.

🚀 Startup / VC

Advanced

claw-back

A provision allowing limited partners to reclaim previously distributed carried interest from GPs if later losses reduce overall fund returns. The nightmare scenario keeping fund managers up at night.

🚀 Startup / VC

Intermediate

pro forma

Financial projections showing what a company's metrics would look like under hypothetical conditions or future scenarios. Latin for 'as a matter of form,' startup-ese for 'this is the fantasy we're selling investors.'

🚀 Startup / VC

Advanced

signaling

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.

🚀 Startup / VC

Intermediate

deployment velocity

The speed at which a venture fund invests its committed capital, often scrutinized as a metric of both deal flow quality and fund discipline. Too slow suggests weak deal flow; too fast suggests poor judgment and FOMO.

🚀 Startup / VC

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See “cram down” in Corporate Speak, Gen-Z Slang, Pirate Speak, and more.

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