Freemium

Definition

A business model where the basic product is free but all the useful features cost money, like a restaurant that gives you a free plate but charges for the food. It's the startup equivalent of a drug dealer's first-one's-free strategy, but legal and with worse margins.

Example Usage

"Our freemium model has ten million free users and twelve paying customers, which we describe to investors as incredible growth potential."

Related Terms

Intermediate

vintage year

The year a venture capital fund closes and begins making investments, used to compare fund performance across similar time periods. It's like birth year for wine or funds—context that matters for quality assessment.

🚀 Startup / VC

Advanced

participating preferred

Preferred stock that gets both its money back first AND participates in remaining proceeds with common stockholders. The 'have your cake and eat it too' of liquidation preferences.

🚀 Startup / VC

Intermediate

equity crowdfunding

Raising capital from numerous small investors through online platforms, democratizing access to startup investment and the opportunity to lose money on early-stage companies. Kickstarter, but instead of getting a T-shirt, you get illiquid securities.

🚀 Startup / VC

Beginner

sand hill shuffle

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.

🚀 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

Intermediate

post-money valuation

Company valuation after investment capital is added, the number founders brag about while carefully omitting the 'post-money' qualifier. What your company is theoretically worth with someone else's money included.

🚀 Startup / VC

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