FOMO Funding

Definition

When VCs invest in a startup primarily because competitors are investing or because they fear missing out on the next big thing—essentially, herd investing masquerading as strategy.

Example Usage

We got FOMO funded by three different VCs who were terrified of missing out on the 'AI opportunity,' despite our product being a mediocre chatbot wrapper.

Origin

Contemporary venture capital culture terminology, combining the acronym FOMO with investment behavior

Fun Fact

FOMO funding has fueled numerous startup bubbles and has a remarkably high failure rate despite the seemingly competitive validation.

Source: Contemporary venture capital terminology

Related Terms

Beginner

Series A, B, C (funding rounds)

Sequential funding rounds named alphabetically—each one supposedly the 'final' round until you need Series D.

🚀 Startup / VC

Advanced

sidecar fund

A supplemental investment vehicle created alongside a main fund to accommodate additional capital from LPs or special investors, often for a specific deal or opportunity too large for the main fund. The VC version of ordering extra fries because one serving isn't enough.

🚀 Startup / VC

Intermediate

impetus

The driving force or stimulus that gets something moving, whether it's a business initiative, social movement, or your motivation to finally start that side project. In startup land, it's whatever convinces founders they can disrupt an industry, usually a personal pain point or too much coffee. Think of it as the corporate equivalent of "what sparked this terrible/brilliant idea?"

🚀 Startup / VC

Beginner

Runway

The amount of time a startup has before it runs out of money and crashes, much like an actual runway but with more crying. It's measured in months and discussed in board meetings with the same energy as a doctor delivering a terminal diagnosis.

🚀 Startup / VC

Beginner

passion tax

The lower compensation that employees accept to work at mission-driven startups or in attractive industries like gaming or entertainment. Employers exploit your dreams to underpay you.

🚀 Startup / VC

Intermediate

tender offer

When a company or investor offers to buy shares from existing shareholders at a set price, providing liquidity without a full exit. A release valve for the equity pressure cooker.

🚀 Startup / VC

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