Seed Round

Definition

The first significant round of funding, where investors plant money in your startup like seeds in a garden, fully expecting that most gardens will produce nothing but weeds and regret. It's typically between $500K and $5M, which is a lot of money for a PowerPoint presentation.

Example Usage

"We raised a $2 million seed round, which our investors described as a bet on the team and we described as two years of pretending to know what we're doing."

Related Terms

Intermediate

founder mode

An operating style where founders maintain deep involvement in company details rather than delegating everything to managers. Popularized by Paul Graham as a counterpoint to conventional management wisdom that says CEOs should stay hands-off.

🚀 Startup / VC

Beginner

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.

🚀 Startup / VC

Intermediate

strategic investor

A corporate entity investing for business reasons beyond pure financial returns, bringing industry expertise and potential partnerships along with capital. Either your best ally or a Trojan horse gathering intelligence for a future competitive assault.

🚀 Startup / VC

Advanced

option pool shuffle

The practice where investors force a startup to create or expand the employee option pool before a funding round, effectively diluting founders rather than new investors. It's a clever way to pay employees with founder equity.

🚀 Startup / VC

Advanced

greenshoe option

A provision in IPO underwriting allowing underwriters to sell additional shares if demand exceeds expectations, typically up to 15% more. Named after the first company to use it, because finance people hate straightforward names.

🚀 Startup / VC

Advanced

synthetic equity

Stock-like compensation arrangements that mimic equity ownership without actually granting shares, often used to avoid dilution or regulatory complications. All the incentive alignment with bonus legal complexity.

🚀 Startup / VC

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