passion tax

Definition

The lower compensation that employees accept to work at mission-driven startups or in attractive industries like gaming or entertainment. Employers exploit your dreams to underpay you.

Example Usage

She took a 30% pay cut to join the climate tech startup—a classic passion tax that her recruiter said would pay off in equity.

Origin

Emerged in startup compensation discussions in the 2010s

Fun Fact

The passion tax disproportionately affects younger workers and contributes to startup sustainability issues when people eventually need actual money.

Source: Startup compensation and recruiting terminology

Related Terms

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inbound interest

When investors, customers, or acquirers proactively reach out to a startup rather than being solicited. It's the entrepreneurial equivalent of being asked to the dance instead of doing the asking.

🚀 Startup / VC

Advanced

full ratchet

The most aggressive anti-dilution protection where early investors' conversion price adjusts to match a down round price, regardless of how small the down round is. Financial punishment for daring to need more money.

🚀 Startup / VC

Intermediate

dry powder

Unspent capital sitting in a VC fund, waiting to be deployed into investments. The ammunition that lets VCs act fast when hot deals emerge or support portfolio companies needing emergency cash.

🚀 Startup / VC

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trademark velocity

The speed at which a startup moves from inception to market dominance within its category. The term is sometimes used when discussing execution speed and competitive moats simultaneously.

🚀 Startup / VC

Beginner

Incubator

A program that nurtures early-stage startups by providing office space, mentorship, and a false sense of security. It's called an incubator because, much like the medical device, it keeps fragile things alive that probably wouldn't survive in the real world.

🚀 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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