Definition
Verbal commitments from investors to participate in a round that aren't legally binding, giving founders a sense of momentum that may evaporate when term sheets arrive. It's Schrödinger's capital raise.
Example Usage
We had $5M soft circled for our Series A, but only $2M converted to actual commitments when the market turned.
Origin
Venture capital fundraising vernacular, playing on 'soft commitment'
Fun Fact
Experienced founders know soft circles are worth approximately zero until signed term sheets arrive—they're often just polite ways to stay warm on a deal.
Source: Venture capital commitment and fundraising terminology
Related Terms
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See “soft circle” in Corporate Speak, Gen-Z Slang, Pirate Speak, and more.
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