Disrupting disruption with disruptive disruptions since 2010.
A provision forcing minority shareholders to join a sale if majority shareholders approve it, preventing holdouts from blocking acquisitions. Democracy dies in shareholder agreements.
Moving to build or sell products at a lower layer of the technology infrastructure, typically where margins are thinner but the market is larger. Often happens when companies realize their original niche is too small.
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 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.
Venture funds started by former Tiger Global partners or investors, inheriting their aggressive growth-at-all-costs investment philosophy. They're the offspring that learned well from their parent's playbook.
Verbal commitments from investors to participate in a round that aren't legally binding, giving founders a sense of momentum that may evaporate when term sheets arrive. It's Schrödinger's capital raise.
The exhausting process of pitching multiple venture capital firms on Sand Hill Road in Menlo Park, often receiving similar feedback and soft rejections. It's speed dating for capital, and you're getting ghosted.
A go-to-market strategy dependent on human sales teams to drive customer acquisition, typical in complex B2B products with long sales cycles. The opposite of letting the product sell itself.
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.
Potential customers or deals that have been vetted and meet specific criteria, as opposed to raw leads. It's the difference between people who downloaded your whitepaper and people actually evaluating a purchase.
The company valuation publicly announced or reported in the press, which may differ from the effective valuation once liquidation preferences and other terms are factored in. It's the Instagram filter for startup valuations.
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.
The lower compensation that employees accept to work at mission-driven startups or in attractive industries like gaming or entertainment. Employers exploit your dreams to underpay you.
The practice where investors force a startup to create or expand the employee option pool before a funding round, effectively diluting founders rather than new investors. It's a clever way to pay employees with founder equity.
The strategy of perfecting product-market fit and unit economics in one market before expanding broadly. It's the anti-blitzscaling approach that prioritizes learning over land grabbing.
A funding round where only existing investors participate, with no new outside investors joining. It's either a vote of confidence from believers or a sign that no one else wanted in.
An experienced executive or advisor brought into a startup to add operational credibility and grown-up supervision to a young founding team. Think adult daycare, but for unicorn hopefuls.
When a startup raises funding from institutional VCs after initially bootstrapping or taking only angel money. It's like moving from community college to the Ivy League, complete with higher expectations.
An investment strategy of making many small bets across countless startups, hoping a few will hit big enough to compensate for the inevitable carnage. The venture capital equivalent of buying lottery tickets in bulk.
The most aggressive anti-dilution protection where early investors' conversion price adjusts to match a down round price, regardless of how small the down round is. Financial punishment for daring to need more money.
The information conveyed to the market by investor actions, such as who leads a round or whether insiders participate in follow-ons. In startup land, subtext is text.
Unspent capital sitting in a VC fund, waiting to be deployed into investments. The ammunition that lets VCs act fast when hot deals emerge or support portfolio companies needing emergency cash.
Preferred stock that gets both its money back first AND participates in remaining proceeds with common stockholders. The 'have your cake and eat it too' of liquidation preferences.
A clause letting preferred investors double-dip by getting their liquidation preference back AND participating in the remaining proceeds with common shareholders. It's having your cake, eating it too, and taking a slice of everyone else's.