up round

Definition

A financing round at a higher valuation than previous rounds, signaling growth and traction to the market. The opposite of a down round and considerably better for everyone's mood, if not always their long-term prospects.

Example Usage

The up round at a $150M valuation validated their strategic pivot and gave the team renewed energy, despite bringing massive new growth expectations.

Origin

Standard venture capital terminology, counterpart to 'down round' since the 1980s

Fun Fact

Many up rounds during bubble periods later prove to have been overvalued, but in the moment they feel like validation of every optimistic claim in your pitch deck.

Source: Venture capital financing terminology

Related Terms

Advanced

vulture capital

Investors who prey on distressed startups, offering unfavorable terms when founders are desperate. They prefer the smell of burning runway in the morning.

🚀 Startup / VC

Beginner

equity financing

Raising capital by selling ownership stakes in the company rather than borrowing money. It's the fundamental bargain of venture capital: you get money now, investors get a piece of your future success (or failure).

🚀 Startup / VC

Intermediate

TAM

Total Addressable Market -- the theoretical maximum revenue if you sold your product to every possible customer on Earth, including people who don't want it, can't afford it, and live in places without internet. It's the biggest number in every pitch deck and the most fictional.

🚀 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

Intermediate

Decacorn

A startup valued at over ten billion dollars, because apparently unicorn wasn't exclusive enough and Silicon Valley needed a word that makes mythological creatures sound like a tiered loyalty program. Next up: hectocorn, at which point we're just making up zoo animals.

🚀 Startup / VC

Beginner

distribution

The return of capital to limited partners when a fund exits an investment, either as cash or occasionally as stock, representing the magical moment when paper gains become real money. The VC equivalent of actually getting your lottery winnings instead of just holding a ticket.

🚀 Startup / VC

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