Venture Capitalist (VC)

Beginner 🚀 Startup / VC

Definition

A professional investor who manages large funds and makes risky bets on startups—essentially a gambler with better PR.

Example Usage

Our Series A VC seems nice enough, but they've already replaced our CTO and hired a new COO without asking.

Origin

Terminology dating to the birth of institutional venture capital in the 1950s-60s (ARPA, East Coast money).

Fun Fact

Top-tier VC firms have only a 25-30% success rate with their investments, yet maintain celebrity status.

Source: Venture capital industry terminology

Related Terms

Intermediate

follow-on funding

Additional investment in portfolio companies by existing investors in subsequent rounds. Doubling down on your bets or, less charitably, throwing good money after bad while hoping the first investment wasn't a complete disaster.

🚀 Startup / VC
Advanced

washout round

A financing so dilutive that existing shareholders are essentially wiped out, often following multiple bridge rounds and broken promises. The financial equivalent of starting over but with more emotional baggage.

🚀 Startup / VC
Intermediate

rolling fund

A venture fund structure where capital commitments are made quarterly rather than in one large closing, allowing GPs to start investing immediately. The subscription model comes to venture capital.

🚀 Startup / VC
Advanced

pre-emption rights

The contractual right of existing investors to lead or participate in the next funding round before the company can seek outside investors. It's a first-look deal built into your cap table.

🚀 Startup / VC
Advanced

signaling

The information conveyed to the market by investor actions, such as who leads a round or whether insiders participate in follow-ons. In startup land, subtext is text.

🚀 Startup / VC
Intermediate

soft circle

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.

🚀 Startup / VC

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