down-round

Definition

A funding round at a lower valuation than the previous round, signaling either terrible execution or terrible timing. Triggers anti-dilution provisions and existential crises among founders.

Example Usage

We raised a down-round at 40% of our Series A valuation, which the PR team is calling 'right-sizing our growth expectations.'

Origin

Venture capital terminology formalized during the dot-com crash of 2000-2002

Fun Fact

Down-rounds became so common after 2022 that VCs invented the euphemism 'structured round' to avoid saying the quiet part loud.

Source: Venture capital financing terminology

Related Terms

Beginner

minimum viable product

The most stripped-down version of your product that customers will actually use without demanding a refund—or at least that's the theory. In practice, it's whatever you can ship before running out of money.

🚀 Startup / VC

Beginner

incubation

The magical period where startup founders burn through investor cash while "validating their business model," ostensibly nurturing their fledgling company from idea to viable business. Like hatching eggs, except the eggs cost millions of dollars and most of them produce nothing. Incubators and accelerators love this word because it makes burning money sound scientific and inevitable.

🚀 Startup / VC

Advanced

milestone-based funding

Investment structured to release capital in tranches as the company hits specific targets, giving investors control and founders ulcers. Trust, but verify, but mostly don't trust.

🚀 Startup / VC

Intermediate

churned

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.

🚀 Startup / VC

Advanced

cram down

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.

🚀 Startup / VC

Beginner

acquihire

When a company buys a failing startup primarily for its talent, with the product being immediately shut down. A face-saving exit that's really just an expensive recruiting strategy with better PR.

🚀 Startup / VC

Translate This Term

See “down-round” in Corporate Speak, Gen-Z Slang, Pirate Speak, and more.

Try the Translator

Share This Term

Post on X Share on Facebook Share on LinkedIn

Discover a Term

Intermediate

intubation

The process of inserting a breathing tube down someone's throat and into their trachea because their respiratory system ...