spray and pray

Definition

An investment strategy of making many small bets across countless startups, hoping a few will hit big enough to compensate for the inevitable carnage. The venture capital equivalent of buying lottery tickets in bulk.

Example Usage

Their fund took the spray and pray approach, investing $100K in 200 companies instead of $2M in ten, banking on finding the next Uber.

Origin

Adapted from military slang for automatic weapons fire; applied to VC strategy in the 2000s

Fun Fact

500 Startups pioneered this model with their accelerator program, making hundreds of micro-investments—critics said it couldn't work, but their exits proved otherwise.

Source: Venture capital strategy terminology and fund management literature

Related Terms

Beginner

growth stage

The phase when a startup has proven product-market fit and focuses on scaling revenue, typically raising Series B or C funding. Where dreams of changing the world meet the reality of quarterly revenue targets.

🚀 Startup / VC

Intermediate

Flywheel

A self-reinforcing business cycle where each component feeds the next, creating unstoppable momentum, at least on the whiteboard. In practice, most startup flywheels have the momentum of an actual flywheel purchased from a junkyard -- theoretically functional, practically stuck.

🚀 Startup / VC

Advanced

note tsunami

The overwhelming wave of convertible notes and SAFEs that convert to equity during a priced round, often revealing a far more complex cap table than founders realized. The moment when chickens come home to roost, except the chickens are financial instruments.

🚀 Startup / VC

Intermediate

inside round

A funding round where only existing investors participate, with no new outside investors joining. It's either a vote of confidence from believers or a sign that no one else wanted in.

🚀 Startup / VC

Beginner

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

Intermediate

Cliff

The initial period before any stock options vest, typically one year, during which employees own exactly nothing and question all their life choices. It's called a cliff because if you leave before it, you fall off the edge of ownership into the abyss of having worked for below-market salary for nothing.

🚀 Startup / VC

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