Disrupting disruption with disruptive disruptions since 2010.
The amount of time a startup has before it runs out of money and crashes, much like an actual runway but with more crying. It's measured in months and discussed in board meetings with the same energy as a doctor delivering a terminal diagnosis.
The stage at which a startup makes just enough revenue to cover the founders' basic living expenses, assuming those expenses are limited to instant noodles and shared housing. It's the lowest bar of financial success that still technically counts as success.
An anti-dilution mechanism that adjusts an investor's equity stake if the company raises money at a lower valuation, protecting them from down rounds. Full ratchet is brutal; weighted average is gentler.
Actions taken to make existing capital last longer, typically through cost-cutting, down-rounds, or revenue generation—whatever keeps you alive until the next funding round. Financial life support for startups.
The terrifying state of having mere weeks of cash remaining, when every expense is scrutinized and founders start drafting layoff announcements. The financial equivalent of flying on empty while the engine sputters.
Legal promises in investment agreements where founders swear everything they've said is true and the company isn't hiding skeletons. Breaking these can result in personal liability, making due diligence the most stressful time to discover that intern you hired in 2019 never signed an IP assignment.
A group of users who started in the same time period, tracked to see how many stick around. The cruel truth about how fast people abandon your product.
A fund agreement clause that allows GPs to reinvest early returns back into new deals rather than distributing them to LPs, extending the fund's effective deployment capacity. A controversial provision that LPs love to scrutinize because it delays their returns.
Restructuring a company's capital stack—often a euphemism for 'things went poorly and we need to reset everyone's expectations and ownership.' Can range from modest adjustments to burning everything down and starting over.
Capital set aside by a VC fund to support existing portfolio companies in future rounds. The difference between investing in 20 companies and actually having money to help the 2-3 that work.
A valuation metric calculated by dividing company valuation by annual revenue, popular in tech because it works even when profits are mythical. Allows investors to justify astronomical valuations by citing "industry standards."
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.
A fundraising approach where a startup accepts investor commitments and transfers shares on multiple dates instead of a single closing. It's like a progressive dinner party for term sheets.
Contract provisions allowing investors to force the company to buy back their shares after a certain period, typically if there's no exit. A rarely exercised nuclear option that reminds founders who really has the power.
The percentage of a VC fund set aside for follow-on investments in existing portfolio companies. The math that determines whether your investor can actually support you in the next round or just awkwardly watch.