party round

Definition

A funding round with so many small investors that the cap table looks like a nightclub guest list—lots of names, minimal commitment from anyone. Usually signals either a hot deal everyone wants a piece of, or a desperate founder who couldn't land a lead investor.

Example Usage

After thirty meetings with no term sheet, the founders gave up and did a party round with twelve angel investors and their dentist.

Origin

Silicon Valley slang emerging in the 2010s during the angel investing boom, particularly after AngelList democratized startup investing

Fun Fact

Party rounds became so common in 2013-2014 that Y Combinator partners publicly warned against them, calling them a sign of weakness that could hurt future fundraising.

Source: Venture capital industry terminology

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fund velocity

The speed at which a venture fund moves through its investment cycle, from raising capital to deploying it to returning capital to LPs. Faster isn't always better—ask anyone who inhaled their food and got heartburn.

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qualified pipeline

Potential customers or deals that have been vetted and meet specific criteria, as opposed to raw leads. It's the difference between people who downloaded your whitepaper and people actually evaluating a purchase.

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loss ratio

The percentage of a VC fund's investments that return zero, typically 50-70% despite everyone's confident pitches. The number partners don't mention at LP meetings unless forced.

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anti-dilution provisions

Protective clauses that let early investors maintain their ownership percentage when future rounds price lower, punishing founders for failing to maintain perpetual hockey stick growth. Comes in weighted-average and full-ratchet flavors of pain.

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lock-up period

A contractual restriction preventing insiders from selling shares after an IPO, typically 90-180 days. Because letting founders dump all their stock on day one would be honest but catastrophic for stock price.

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portfolio construction

The strategy for how a fund allocates capital across different investments, stages, sectors, and check sizes. The art of arranging your bets so at least one or two have to work out mathematically.

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See “party round” in Corporate Speak, Gen-Z Slang, Pirate Speak, and more.

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