Disrupting disruption with disruptive disruptions since 2010.
The minimum annual return (typically 8%) that limited partners receive before general partners can claim carried interest, functioning as a hurdle rate to ensure LPs get paid first. Think of it as making the GP eat their vegetables before getting dessert.
A shareholder who has contractual rights to approve or block an acquisition or IPO, giving them veto power over exit decisions regardless of ownership percentage. Democracy in action, if democracy meant a small group could overrule the majority.
The practice of revaluing portfolio companies to reflect current fair market value rather than cost basis, theoretically providing accurate fund performance but practically involving educated guesses and wishful thinking. Quarterly existential crisis as an accounting process.
The art of watering down your ownership stake in a company, usually because someone with deeper pockets decided your equity pie needs more slices. In the startup world, this happens when new investors come aboard and everyone's percentage shrinks faster than your enthusiasm during Series D. It's not personal, it's just cap table mathematics.
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.'
A startup that returns an entire venture fund's value through a single investment, making every other deal in the portfolio irrelevant. Rarer than unicorns and more impactful than a hundred modest successes combined.
Keeping multiple strategic paths open while committing to none, often praised as strategic flexibility or criticized as inability to make decisions. The business equivalent of dating multiple people because you're 'keeping your options open.'
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.
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.
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."
The degree to which a founder's background, skills, and experience uniquely position them to solve a particular problem. The startup equivalent of being born for this moment, or at least having a plausible narrative for why you were.
Rights allowing majority shareholders to force minority shareholders to join in selling the company. Corporate democracy's escape hatch, where your vote doesn't matter if enough people with more shares decide differently.
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.
Options for investors to purchase additional equity at a predetermined price, typically sweetening deals when a startup is desperate or when investors have serious FOMO about missing upside. The financial equivalent of a rain check.
Protective clauses that let early investors maintain their ownership percentage when future rounds price lower, punishing founders for failing to maintain perpetual hockey stick growth. Comes in weighted-average and full-ratchet flavors of pain.
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.
The right to participate in future financing rounds to maintain ownership percentage, preventing dilution through passive-aggressive legal provisions. Pro rata rights by another name, somehow more intimidating.
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.
Emergency funding meant to tide a startup over until the 'real' funding round happens, often at desperate terms. Named after a bridge because you're hoping it doesn't collapse before you reach the other side.
The VC who actually makes investment decisions and sits on boards, bearing unlimited liability but collecting management fees and carried interest. The person founders pitch to, hoping they're in a good mood.
A chair at the table where actual company decisions get made, typically negotiated by lead investors who want control over their millions. Where strategy is debated, CEOs are fired, and founders learn they don't actually run their company alone.
Someone who gives you money in exchange for a piece of your company, future profits, or the thrill of watching their capital evaporate. They're either your best friend or worst nightmare, depending on whether your quarterly numbers are trending upward. In startup land, they're the people whose calls you always take.
Having the qualities of someone who starts businesses, takes risks, and believes their idea will totally disrupt an industry despite statistical odds suggesting otherwise. It's the adjective form of optimistic delusion mixed with genuine innovation and an unhealthy comfort with uncertainty. Basically, it describes people who see opportunities where normal humans see reasons to keep their day job.
A contractual mechanism that shields early investors from dilution when a startup raises money at a lower valuation than previous rounds. It's basically insurance against your company becoming less cool than you thought it was.