proprietary deal flow

Definition

Investment opportunities sourced through unique channels rather than pitch competitions and cold emails, giving VCs the illusion they've discovered something competitors haven't. Usually just means they have better interns.

Example Usage

Our firm prides itself on proprietary deal flow, which mostly means we skim through YC applications before Demo Day.

Origin

Investment banking terminology adapted to venture capital in the 1990s

Fun Fact

Despite claims of proprietary sourcing, most VCs invest in the same hot companies because nobody wants to be the one who passed on the unicorn.

Source: Venture capital sourcing terminology

Related Terms

Advanced

409A valuation

An IRS-mandated appraisal of your company's common stock price, required so employees don't accidentally commit tax fraud when exercising options. It's always mysteriously lower than what you tell investors your company is worth.

🚀 Startup / VC

Intermediate

deployment velocity

The speed at which a venture fund invests its committed capital, often scrutinized as a metric of both deal flow quality and fund discipline. Too slow suggests weak deal flow; too fast suggests poor judgment and FOMO.

🚀 Startup / VC

Beginner

Ramen Profitable

The stage at which a startup makes just enough revenue to cover the founders' basic living expenses, assuming those expenses are limited to instant noodles and shared housing. It's the lowest bar of financial success that still technically counts as success.

🚀 Startup / VC

Intermediate

pro rata

The right to maintain one's ownership percentage in subsequent funding rounds by investing additional capital proportionally. The 'I called dibs' clause of venture capital.

🚀 Startup / VC

Advanced

Down Round

A funding round where a company raises money at a lower valuation than the previous round, which is the startup equivalent of your house being appraised for less than you paid for it, except everyone on Twitter knows about it. Morale is measured in tears per employee.

🚀 Startup / VC

Beginner

Stealth Mode

When a startup operates in secrecy to avoid competitors copying their idea, which assumes competitors would care about the idea in the first place. It's the startup equivalent of whispering at a party where nobody is listening.

🚀 Startup / VC

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