party to the exit

Definition

A shareholder who has contractual rights to approve or block an acquisition or IPO, giving them veto power over exit decisions regardless of ownership percentage. Democracy in action, if democracy meant a small group could overrule the majority.

Example Usage

Our Series B lead investor is a party to the exit, so we need their approval on this acquisition offer even though they own only 15%.

Origin

Corporate governance and transaction terminology from venture capital agreements

Fun Fact

Being a party to the exit is distinct from having drag-along rights—it's defensive rather than offensive power over exit decisions.

Source: Venture capital term sheets and transaction documents

Related Terms

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CAC

Customer Acquisition Cost—how much you spend in sales and marketing to land one customer. VCs compare this to lifetime value to determine if your business model is actually viable or just an expensive hobby.

🚀 Startup / VC

Intermediate

ownership target

The percentage of a company a VC aims to own to make an investment worthwhile relative to their fund size. It's why large funds often can't invest in your seed round—they need bigger slices.

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Decacorn

A startup valued at over ten billion dollars, because apparently unicorn wasn't exclusive enough and Silicon Valley needed a word that makes mythological creatures sound like a tiered loyalty program. Next up: hectocorn, at which point we're just making up zoo animals.

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Series A

The first major institutional funding round, where venture capitalists invest millions based on actual metrics instead of just vibes, which eliminates approximately 90% of startups. It's called Series A because it's the first of potentially many rounds, like academic grades but for companies.

🚀 Startup / VC

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acquihire

When a company buys a failing startup primarily for its talent, with the product being immediately shut down. A face-saving exit that's really just an expensive recruiting strategy with better PR.

🚀 Startup / VC

Advanced

Blitzscaling

The strategy of growing a company at breakneck speed while intentionally ignoring efficiency, profitability, and the screams of your finance team. It's named after the German military tactic because both involve advancing recklessly and hoping the supply lines hold.

🚀 Startup / VC

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