spray-and-pray

Definition

An investment strategy of making many small bets across a wide portfolio, hoping a few massive winners will compensate for numerous failures—essentially portfolio construction as gambling. The scatter-shot approach favored by funds who believe they can't predict winners.

Example Usage

Their spray-and-pray strategy led to 150 seed investments, knowing that 1-2 unicorns would return the entire fund.

Origin

Colloquial term emerging in venture capital circles in the 2000s-2010s

Fun Fact

While often criticized, spray-and-pray can be rational given power law returns, though it requires significant management bandwidth to track so many companies.

Source: Venture capital investment strategy terminology

Related Terms

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

network effects

The magical property where your product becomes more valuable as more people use it—or what every social startup claims to have despite zero evidence. True network effects are rarer than honest user growth numbers.

🚀 Startup / VC

Advanced

negative churn

When expansion revenue from existing customers exceeds lost revenue from cancellations, the holy grail of SaaS metrics. It's losing customers but somehow making more money anyway.

🚀 Startup / VC

Intermediate

strategic investor

A corporate entity investing for business reasons beyond pure financial returns, bringing industry expertise and potential partnerships along with capital. Either your best ally or a Trojan horse gathering intelligence for a future competitive assault.

🚀 Startup / VC

Intermediate

party round

A funding round with so many small investors that the cap table looks like a nightclub guest list—lots of names, minimal commitment from anyone. Usually signals either a hot deal everyone wants a piece of, or a desperate founder who couldn't land a lead investor.

🚀 Startup / VC

Beginner

vulture capitalist

A pejorative term for investors who swoop in during distressed situations to extract maximum value at founders' expense. The same people who call themselves 'value investors' on their websites.

🚀 Startup / VC

Translate This Term

See “spray-and-pray” in Corporate Speak, Gen-Z Slang, Pirate Speak, and more.

Try the Translator

Share This Term

Post on X Share on Facebook Share on LinkedIn

Discover a Term

Beginner

wu2kilu

want you to know I love you...