Market dynamics, business models, and industry factors that drive venture capital decisions.
52 terms
A startup built primarily on top of an existing AI model or API rather than developing its own foundational model.
Software-as-a-service products sold to businesses, the dominant investment category in venture capital.
The gap between what a buyer is willing to pay and what a seller is willing to accept for a private company's shares.
A market phase where asset valuations significantly exceed fundamental value, driven by speculation, excess capital, and narrative rather than earnings or cash flows.
The financial markets where long-term debt and equity securities are bought and sold, including the IPO market.
The period when market conditions are favorable for IPOs, fundraising, or other capital-raising activities.
The total amount of committed but undeployed capital in venture funds, which can inflate valuations and distort market dynamics.
A digital economy built around individuals monetizing audiences through platforms, tools, and communities.
A private company valued at $10 billion or more — a step above unicorn status.
Startups built on significant scientific or engineering innovation that creates fundamental technological advantages.
When falling public market values shrink an LP's total portfolio, making their VC allocation appear disproportionately large and potentially triggering a pullback from new commitments.
The total amount of committed but undeployed capital available to venture capital funds, indicating the industry's capacity for future investment activity.
The growth phase after product-market fit where a startup scales operations, team, and revenue aggressively.
The risk that negative media coverage could damage a company's reputation, valuation, or ability to operate.
An investor who takes significant positions in companies and pushes for changes to increase shareholder value.
The tendency for VCs to follow each other into the same sectors, stages, or deals, creating bubbles and crowded investment categories.
Software products designed to serve multiple industries rather than a specific vertical.
A startup focused on highly localized markets or services.
The economic cost borne by the less-informed party in a transaction due to the other party having superior information about the asset's true value.
The degree to which venture capital valuations, fundraising activity, and exit markets are affected by changes in prevailing interest rates and monetary policy.
The overall attitude of investors toward a sector or market cycle.
Companies at Series C and beyond that have proven business models and are scaling toward profitability or IPO.
The market failure where information asymmetry causes high-quality deals to leave the market, leaving mostly poor-quality opportunities for less-informed investors.
A market composed of many small customer segments that collectively represent significant demand.
A state where most potential customers already use competing products.
The risk that a fund's vintage year coincides with a market peak, leading to elevated entry prices and compressed returns.
A platform that connects buyers and sellers, taking a percentage of each transaction as revenue.
Small, niche SaaS businesses often built by solo founders.
Companies typically valued between $100M-$1B, too large for early-stage VCs and too small for the largest growth funds.
A revenue structure where creators or investors earn ongoing royalties from secondary sales of non-fungible tokens, enforced through smart contract logic.
When a fund's secondary market price is below its reported NAV, reflecting buyer skepticism about the accuracy of portfolio valuations.
A regulatory restriction on public communications by a company and its underwriters during the IPO process.
Serviceable Addressable Market — the portion of the TAM (Total Addressable Market) that a company can realistically target and serve given its current product, geography, and business model.
Serviceable Obtainable Market — the realistic portion of SAM a company can capture in the near term given its current resources, competitive position, and go-to-market capacity.
Software as a Service — cloud-delivered software accessed via subscription, generating recurring revenue. The dominant business model in modern enterprise software.
The shifting of venture capital investment focus from one technology sector to another as market cycles, hype curves, and macro trends evolve.
The network of investors, founders, accelerators, universities, and service providers supporting startups.
The balance between available capital seeking deals and quality startups seeking funding in the venture market.
Total Addressable Market — the total revenue opportunity available if a company captured 100% of its target market.
The percentage of each transaction a marketplace or platform retains as revenue — the fundamental monetization lever for two-sided marketplace businesses.
A prolonged downturn in venture funding, startup valuations, and tech hiring — characterized by layoffs, down rounds, and reduced VC activity.
The market disruption caused when crossover hedge funds deploy massive capital into venture at unprecedented speed and scale.
A private startup valued at $1 billion or more. The term was coined by Aileen Lee in 2013 to describe the rarity of such companies.
Growth achieved through subsidized unit economics — where each new customer or transaction loses money — justified by the expectation of future scale or market dominance.
A decrease in startup valuations during market downturns.
The interconnected network of founders, investors, talent, and institutions supporting venture-backed companies.
Software designed for a specific industry such as healthcare, construction, or finance.
The phenomenon where a fund's performance is significantly influenced by the year it began investing, due to prevailing market conditions, entry valuations, and macroeconomic environment.
The influence of macroeconomic interest rates on venture capital investment activity.
Investment capital primarily seeking consistent income returns rather than capital appreciation, which can enter VC markets during low-interest-rate environments.
A macroeconomic environment of near-zero interest rates that historically fueled aggressive venture investing.
A company that continues operating but has little realistic chance of significant growth or exit.