ownership target

Definition

The percentage of a company a VC aims to own to make an investment worthwhile relative to their fund size. It's why large funds often can't invest in your seed round—they need bigger slices.

Example Usage

They have a 15% ownership target, so they can't lead our $2M round without it looking weird.

Origin

Venture capital fund economics and return modeling

Fun Fact

Ownership targets create the 'series crunch' where early-stage funds can't follow on and growth funds won't lead, leaving startups orphaned between stages.

Source: Venture capital fund economics and strategy

Related Terms

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scaling

The corporate fantasy of growing a business exponentially while somehow maintaining quality, usually uttered right before everything falls apart. It's the process of increasing capacity to handle growth—or in startup speak, the thing you'll figure out later after raising millions in VC funding. In tech, it means making systems handle more users; in reality, it means discovering all the shortcuts you took when building the foundation.

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Key Metrics

The numbers a startup tracks to measure success, carefully selected to be whichever ones happen to be going up. When those numbers go down, they become vanity metrics, and new key metrics are discovered.

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Moonshot

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scout program

A system where VCs give small pools of capital to well-connected individuals to make investments on the firm's behalf. A brilliant way to outsource deal flow while paying in equity instead of salary.

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tourist investor

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claw-back

A provision allowing limited partners to reclaim previously distributed carried interest from GPs if later losses reduce overall fund returns. The nightmare scenario keeping fund managers up at night.

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