flat round

Definition

A financing round raised at the same valuation as the previous round, suggesting a company has neither advanced nor declined—essentially treading water while burning cash. More diplomatically acceptable than a down round but almost as concerning to investors.

Example Usage

We raised $10M in a flat round at our Series A valuation, which at least avoided anti-dilution triggers but signaled stagnation.

Origin

Venture capital financing terminology emerging alongside down round terminology

Fun Fact

Flat rounds are sometimes structured as down rounds with nominal increases (like 5% up) to avoid triggering anti-dilution provisions on technicalities.

Source: Venture capital financing terminology

Related Terms

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drag-along

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.

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co-investment rights

Special privileges allowing certain LPs to invest additional money directly into specific portfolio companies alongside the fund, usually with lower or no fees. The VIP backstage pass of venture investing.

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rolling fund

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.

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pay-to-play

A provision requiring existing investors to participate in future funding rounds or lose their special privileges. The venture capital equivalent of 'use it or lose it.'

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investment memo

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.

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Series A, B, C

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.

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