passion tax

Definition

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.

Example Usage

She took a 30% pay cut to join the climate tech startup—a classic passion tax that her recruiter said would pay off in equity.

Origin

Emerged in startup compensation discussions in the 2010s

Fun Fact

The passion tax disproportionately affects younger workers and contributes to startup sustainability issues when people eventually need actual money.

Source: Startup compensation and recruiting terminology

Related Terms

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Flywheel

A self-reinforcing business cycle where each component feeds the next, creating unstoppable momentum, at least on the whiteboard. In practice, most startup flywheels have the momentum of an actual flywheel purchased from a junkyard -- theoretically functional, practically stuck.

🚀 Startup / VC

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hot deal

A startup fundraising round with overwhelming investor demand, usually led by a top-tier firm with multiple others fighting for allocation. The velvet rope nightclub of venture capital.

🚀 Startup / VC

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operator

A VC or advisor who has actually built and run companies rather than just invested in them from the sidelines. The startup equivalent of a war veteran versus someone who just played Call of Duty.

🚀 Startup / VC

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hurdle rate

The minimum return a VC fund must achieve before partners can collect carried interest—usually 8% annually. The bar LPs set to ensure their capital at least beats a boring index fund before the GP gets rich.

🚀 Startup / VC

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venture debt

Loans provided to venture-backed startups, typically secured by assets or future funding rounds. It's called 'non-dilutive capital,' which really means 'you'll dilute yourself later when you can't pay it back.'

🚀 Startup / VC

Intermediate

impetus

The driving force or stimulus that gets something moving, whether it's a business initiative, social movement, or your motivation to finally start that side project. In startup land, it's whatever convinces founders they can disrupt an industry, usually a personal pain point or too much coffee. Think of it as the corporate equivalent of "what sparked this terrible/brilliant idea?"

🚀 Startup / VC

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