graduation round

Definition

When a startup raises funding from institutional VCs after initially bootstrapping or taking only angel money. It's like moving from community college to the Ivy League, complete with higher expectations.

Example Usage

After three years of angel funding, the company closed a $10M graduation round led by Sequoia.

Origin

Emerged in startup financing vernacular in the 2000s

Fun Fact

Graduation rounds often come with a reality check as professional investors impose proper governance and metrics tracking.

Source: Startup financing progression terminology

Related Terms

Beginner

lead investor

The VC firm that sets the terms and does the heavy lifting in a funding round, while other investors gratefully follow along. Someone has to negotiate while everyone else free-rides.

🚀 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

Intermediate

ARR

Annual Recurring Revenue -- the amount of subscription money a company expects to collect over a year, assuming nobody cancels, which they will. It's the startup metric most likely to appear in fundraising decks and least likely to match reality.

🚀 Startup / VC

Intermediate

lever

A mechanical advantage device that pivots on a fulcrum to multiply force, or in startup parlance, anything you can use to do more with less. Every MBA in Silicon Valley thinks they've found a "lever" to pull, usually right before asking for $5M in seed funding. Physics teachers hate how loosely VCs use this term, but hey, at least someone's paying attention to simple machines.

🚀 Startup / VC

Advanced

qualified small business stock

IRS tax designation (Section 1202) that can exclude up to $10 million in gains from federal taxes for early startup investors, assuming you navigate the Byzantine requirements. The tax break that makes angel investing slightly less insane.

🚀 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

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reverse transfer

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