Disrupting disruption with disruptive disruptions since 2010.
The additional value investors pay for governance rights and control provisions beyond pure economics, willing to pay higher prices for board seats and veto powers. The surcharge for not trusting founders to run the company they founded.
An internal document where VCs justify their investment thesis to partners, typically written with supreme confidence that will be mocked at the next downturn. The receipts for future 'I told you so' moments.
Selling existing shares to other investors rather than the company issuing new shares, allowing early shareholders to get liquid without diluting anyone. The financial equivalent of sneaking out the back door.
The power to vote on corporate matters, typically held by common stock and sometimes special classes of preferred stock. Theoretically democratic, practically controlled by whoever wrote the term sheet.
A deferred payment structure in an acquisition where sellers receive additional money only if the business hits specific milestones post-sale. It's how acquirers say 'we believe your projections!' while quietly not paying for them upfront.
A proactive sales approach where the company reaches out to potential customers rather than waiting for inbound interest. It's the difference between fishing with a net and hoping fish jump into your boat.
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."
Term sheet provisions where investor rights decrease as the company hits performance milestones. A way to say 'we trust you more as you prove you're not incompetent.'
An entrepreneur driven primarily by solving a problem or advancing a cause rather than financial gain. They're the idealists who actually believe their mission statement.
The AARRR framework measuring Acquisition, Activation, Retention, Referral, and Revenue—the key metrics for growth-stage startups. Named because AARRR sounds like a pirate, which is somehow still funny to founders.
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.
The speed at which a venture fund invests its committed capital, often scrutinized as a metric of both deal flow quality and fund discipline. Too slow suggests weak deal flow; too fast suggests poor judgment and FOMO.
A structural competitive edge that's difficult or impossible for competitors to replicate, like proprietary technology, exclusive partnerships, or regulatory capture. What founders claim to have and what actually exists rarely overlap perfectly.
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.
Surrounded by a protective water-filled trench, which in business parlance describes a company with such strong competitive advantages that rivals can't touch them. Warren Buffett made this term famous by obsessing over companies with "economic moats" that defend market share like medieval fortifications. These days, everyone claims they have a moat, but most are more like puddles.
Sequential institutional funding rounds designated by letters, theoretically indicating maturity but practically just measuring how much money you've convinced people to give you. The alphabet of ambition.
Raising capital from numerous small investors through online platforms, democratizing access to startup investment and the opportunity to lose money on early-stage companies. Kickstarter, but instead of getting a T-shirt, you get illiquid securities.
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 sadistic waiting period before any of your stock options actually belong to you, typically one year. It's designed to prevent you from taking the job and immediately quitting, essentially holding your compensation hostage for good behavior.
The startup mantra that romanticizes abandoning your original business plan when it becomes clear nobody wants what you're building. It's plan B through Z, pitched as strategic thinking rather than desperate flailing.
Making investment decisions at lightning speed with minimal diligence, named after Tiger Global's spray-and-pray approach during the 2020-2021 bubble. High velocity, low conviction, maximum FOMO.
A provision preventing startups from soliciting other offers while negotiating terms, ensuring you can't play investors against each other. The dating equivalent of 'we're exclusive now' after one coffee.
The hierarchical order in which different classes of investors get paid during an exit, determined by liquidation preferences from multiple funding rounds. It's a legal game of Jenga where common stockholders usually lose.
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.