lead investor

Definition

The VC firm that sets the terms and does the heavy lifting in a funding round, while other investors gratefully follow along. Someone has to negotiate while everyone else free-rides.

Example Usage

Once we secured Andreessen Horowitz as our lead investor, filling out the round became trivially easy.

Origin

Investment syndication terminology from traditional finance

Fun Fact

Lead investors typically invest 50-75% of a round's total and demand a board seat for their trouble.

Source: Venture capital financing terminology

Related Terms

Intermediate

Churn Rate

The percentage of customers who cancel your service each month, also known as the number that keeps founders awake at 3 AM. A high churn rate means your product is a revolving door; a low one means customers haven't figured out how to find the cancel button yet.

🚀 Startup / VC

Advanced

trough of sorrow

The extended period after initial startup excitement fades when growth stalls and reality sets in, but you're too committed to quit. It's the emotional valley between 'we're going to change the world' and 'maybe we should get real jobs.'

🚀 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

Intermediate

lock-up period

A contractual restriction preventing insiders from selling shares after an IPO, typically 90-180 days. Because letting founders dump all their stock on day one would be honest but catastrophic for stock price.

🚀 Startup / VC

Advanced

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.'

🚀 Startup / VC

Intermediate

rolling close

A fundraising approach where a startup accepts investor commitments and transfers shares on multiple dates instead of a single closing. It's like a progressive dinner party for term sheets.

🚀 Startup / VC

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