incubation

Definition

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.

Example Usage

After six months of incubation at TechStars, the team finally admitted their blockchain-for-pets idea wasn't going to work.

Source: Common industry terminology

Related Terms

Advanced

super pro rata

The right to invest more than your proportional share in a subsequent round, allowing early investors to increase their ownership. Pro rata's aggressive older sibling who always wants more.

🚀 Startup / VC

Beginner

passion tax

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.

🚀 Startup / VC

Intermediate

conversion rights

The privilege granted to preferred shareholders to convert their fancy preferred stock into common stock, typically exercised when they want to sell or when common stock becomes more valuable (rare but delightful). It's a one-way ticket that investors usually only take when they're confident they're not leaving money on the table.

🚀 Startup / VC

Advanced

full ratchet

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.

🚀 Startup / VC

Intermediate

monetise

The delicate art of figuring out how to extract money from something that users currently enjoy for free, typically resulting in a barrage of ads, paywalls, or premium subscriptions. This verb represents the moment when platforms transition from "community-building" to "shareholder-pleasing," often coinciding with users complaining that everything good gets ruined. Monetization strategies range from subtle to obnoxious, but they all share the goal of turning engagement into revenue.

🚀 Startup / VC

Advanced

pre-emption rights

The contractual right of existing investors to lead or participate in the next funding round before the company can seek outside investors. It's a first-look deal built into your cap table.

🚀 Startup / VC

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