IPO (Initial Public Offering)

Definition

A startup's dream scenario where it becomes a public company and founders finally get to sell their stock—statistically less likely than winning the lottery.

Example Usage

Our 10-year plan includes an IPO at $5B valuation, which is completely grounded in reality and not at all based on fever dreams.

Origin

Standard finance terminology; became the 'goal' of every startup despite occurring in <0.5% of cases.

Fun Fact

Fewer than 50 US tech startups IPO per year, while thousands of startups raise venture funding with IPO dreams.

Source: Finance and corporate terminology

Related Terms

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

Beginner

hot deal

A startup fundraising round with overwhelming investor demand, usually led by a top-tier firm with multiple others fighting for allocation. The velvet rope nightclub of venture capital.

🚀 Startup / VC

Intermediate

soft circle

Verbal commitments from investors to participate in a round that aren't legally binding, giving founders a sense of momentum that may evaporate when term sheets arrive. It's Schrödinger's capital raise.

🚀 Startup / VC

Intermediate

co-sale rights

Also called tag-along rights, these allow minority shareholders to join a sale transaction if majority holders are selling their shares. The 'if you're abandoning ship, I'm coming too' clause.

🚀 Startup / VC

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

pay-to-play provision

A punitive clause forcing existing investors to participate in future rounds or lose their special privileges—the venture capital equivalent of 'put up or shut up.' Popular after market downturns when companies need to separate real believers from fair-weather friends.

🚀 Startup / VC

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