Disrupting disruption with disruptive disruptions since 2010.
The percentage of customers who cancel your service each month, also known as the number that keeps founders awake at 3 AM. A high churn rate means your product is a revolving door; a low one means customers haven't figured out how to find the cancel button yet.
A loan that converts into equity during a future funding round, allowing investors and founders to avoid the uncomfortable conversation about what the company is actually worth. It's a financial IOU wrapped in optimism and legal jargon.
A spreadsheet that tracks who owns what percentage of a company, growing increasingly depressing with each funding round as the founders' share shrinks like a wool sweater in a dryer. It's the scoreboard of startup capitalism.
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.
Customer Acquisition Cost—how much you spend in sales and marketing to land one customer. VCs compare this to lifetime value to determine if your business model is actually viable or just an expensive hobby.
The time window (usually 3-5 years) during which a venture fund actively deploys capital into new investments, after which the GP is supposed to stop writing checks and focus on managing the existing portfolio. Think of it as the VC equivalent of last call at the bar.
A financing round where new investors impose unfavorable terms on existing shareholders who lack the power to block it. Essentially a hostile takeover by people already inside your building.
Unsolicited outreach to investors or customers who have no idea who you are and probably don't care. The digital equivalent of knocking on strangers' doors, with similar success rates.
Reserved portion of an acquisition's proceeds specifically allocated to employees or specific shareholders, ensuring they benefit even if the waterfall would otherwise drown them. Exit sharing mandated by negotiation or generosity.
Past tense of churning, describing customers who've abandoned ship or accounts that have been excessively traded for commissions. In the startup world, it's the past tense of failure—these are the users who tried your product and decided literally anything else was better. When your investors ask about churned customers, it's never a fun conversation.
The privilege granted to preferred shareholders to convert their fancy preferred stock into common stock, typically exercised when they want to sell or when common stock becomes more valuable (rare but delightful). It's a one-way ticket that investors usually only take when they're confident they're not leaving money on the table.
A provision allowing limited partners to reclaim previously distributed carried interest from GPs if later losses reduce overall fund returns. The nightmare scenario keeping fund managers up at night.
A venture capital fund owned and operated by a larger corporation to invest in strategically relevant startups. They bring money and potential acquisition interest, but everyone knows who they're really working for.
The formal demand from a general partner to limited partners to wire their committed funds, usually with 10-30 days notice and an implied "or else" hanging in the air. It's how venture funds move committed money from promised to deployed.
Any transaction that transfers majority ownership or control of a company, typically triggering various contractual provisions like vesting acceleration, payment obligations, or approval rights. The legal definition of when your startup stops being yours.
The unethical practice where brokers excessively trade in a client's account primarily to generate commissions rather than profits, essentially treating your portfolio like a butter-making operation. In SaaS, it refers to the rate at which customers cancel their subscriptions, making it the metric that haunts every startup founder's dreams. Either way, it's excessive activity that benefits someone other than you.
The VC's cut of investment profits, typically 20% of gains above a certain return threshold. How general partners get rich while limited partners provide the actual money—the ultimate performance fee.
A term in VC fund agreements where once LPs get their initial investment back, GPs get an accelerated share of profits until their normal split is reached. Basically letting the manager 'catch up' to their 20% after paying back investors.
A resilient company that survives on minimal resources and refuses to die despite market conditions that would kill competitors. They're scrappy, resourceful, and nearly impossible to eliminate.
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.
Short for 'carried interest'—the percentage of fund profits that goes to VCs as performance compensation, typically 20%. It's why venture capitalists drive Teslas even when most of their portfolio is worthless.
Special privileges allowing certain LPs to invest additional money directly into specific portfolio companies alongside the fund, usually with lower or no fees. The VIP backstage pass of venture investing.
Patient, flexible funding that accepts below-market returns to achieve social impact alongside financial returns, pioneered by organizations like Omidyar Network. Capitalism with a conscience, or venture capital with lowered expectations, depending on your perspective.
The process of taking an idea, product, or technology and transforming it into something that actually makes money, because apparently innovation for its own sake doesn't pay the bills. It's the startup world's coming-of-age ceremony, where brilliant concepts either become profitable products or expensive lessons. Essentially, it's the bridge between "we built something cool" and "people are actually buying it."