founder-friendly

Definition

A marketing term VCs use to describe their approach, supposedly indicating fair terms and supportive behavior. In practice, it often means 'we won't screw you quite as hard as the other guys.'

Example Usage

Their deck claimed they were the most founder-friendly firm on Sand Hill Road, right before proposing a 3x liquidation preference.

Origin

Emerged in the 2010s as competition for hot deals intensified

Fun Fact

Every VC firm claims to be founder-friendly, making the term virtually meaningless—it's the participation trophy of venture capital.

Source: Venture capital marketing and startup financing culture

Related Terms

Advanced

participation rights

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.

🚀 Startup / VC

Intermediate

up-stack

Moving to build or sell products at higher layers of technology infrastructure, typically where margins are better and you're further from commoditized infrastructure. The opposite of down-stack, and usually more profitable.

🚀 Startup / VC

Intermediate

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.

🚀 Startup / VC

Intermediate

option pool

A reserve of shares set aside to recruit employees with stock options, typically carved out before valuation to dilute founders rather than investors. A necessary evil that feels like robbery when you're calculating founder ownership.

🚀 Startup / VC

Intermediate

Vesting

The process by which employees gradually earn their stock options over time, designed to keep people from taking the equity and running. It's a four-year golden handcuff that makes quitting feel like leaving money on the table, even when the money is imaginary.

🚀 Startup / VC

Intermediate

first-mover advantage

The theoretical benefit of being first to market, used to justify rushing out half-baked products. History suggests fast-follower advantage is more valuable, but that doesn't sound as impressive in pitch decks.

🚀 Startup / VC

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