Platform / Marketplace

Definition

A business model where users interact directly with each other rather than with the company. It's appealing because network effects theoretically create moats, but achieving them is harder than VC partners admit.

Example Usage

We're not a software company; we're a marketplace connecting suppliers to buyers, which sounds like we have unfair competitive advantages.

Origin

Business model terminology, popularized by Silicon Valley in the 2000s

Fun Fact

Most marketplace startups fail because achieving liquidity (enough buyers and sellers) is exceptionally difficult

Source: Platform business model terminology

Related Terms

Advanced

shadow equity

Informal promises of future equity that aren't documented in legal agreements, often made to early advisors or contributors. A lawsuit waiting to happen, wrapped in a handshake.

🚀 Startup / VC

Advanced

Secondary Markets

Platforms where employees and early shareholders can sell restricted private stock before IPO, giving insiders a chance to diversify while theoretically validating company valuation.

🚀 Startup / VC

Intermediate

SOM

Serviceable Obtainable Market—what you can realistically capture in the first 3-5 years. It's the intersection of TAM, SAM, and aggressive optimism.

🚀 Startup / VC

Intermediate

prospectus

The glossy sales document that makes every investment opportunity look like the next Amazon and every university look like Hogwarts, carefully balanced between legal obligation and marketing fantasy. In startup land, it's the formal document that transforms 'three guys in a garage with an app idea' into 'disruptive technology platform poised for exponential growth.' Every prospectus contains enough disclaimers to absolve everyone of everything while somehow still convincing you to hand over your money.

🚀 Startup / VC

Beginner

IPO (Initial Public Offering)

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.

🚀 Startup / VC

Intermediate

monetise

The delicate art of figuring out how to extract money from something that users currently enjoy for free, typically resulting in a barrage of ads, paywalls, or premium subscriptions. This verb represents the moment when platforms transition from "community-building" to "shareholder-pleasing," often coinciding with users complaining that everything good gets ruined. Monetization strategies range from subtle to obnoxious, but they all share the goal of turning engagement into revenue.

🚀 Startup / VC

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