vulture capitalist

Definition

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.

Example Usage

After we missed our revenue target, some vulture capitalist offered to recap the company at a $3M valuation when we'd raised at $30M.

Origin

Sardonic play on 'venture capitalist,' popularized in the 1980s

Fun Fact

Some investors have reclaimed the term, arguing that providing capital to struggling companies—even at harsh terms—beats bankruptcy, which is technically true but doesn't make founders feel better.

Source: Colloquial startup and VC community slang

Related Terms

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pay-it-forward mentality

The cultural expectation in startup ecosystems that successful entrepreneurs and investors should help newcomers, supposedly creating a virtuous cycle. In practice, it's often networking disguised as altruism.

🚀 Startup / VC

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founder-friendly

A marketing term VCs use to describe their approach, supposedly indicating fair terms and supportive behavior. In practice, it often means 'we won't screw you quite as hard as the other guys.'

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Intermediate

management fee

The annual fee (typically 2% of committed capital) that VC fund managers charge to keep the lights on, whether or not they make good investments. The guaranteed money that pays for offices, salaries, and kombucha before carried interest kicks in.

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Intermediate

co-sale rights

Also called tag-along rights, these allow minority shareholders to join a sale transaction if majority holders are selling their shares. The 'if you're abandoning ship, I'm coming too' clause.

🚀 Startup / VC

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vesting acceleration

Speeding up the vesting schedule of stock options, typically triggered by acquisition or termination. It's the consolation prize when your startup gets acquired and you're suddenly unemployed.

🚀 Startup / VC

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TAM/SAM/SOM

Total Addressable Market, Serviceable Addressable Market, and Serviceable Obtainable Market—three increasingly pessimistic estimates of how much money you might theoretically make. The trilogy of optimism, realism, and 'if everything goes perfectly.'

🚀 Startup / VC

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