Strategic approaches to portfolio construction, investment thesis, and fund management.
125 terms
A company built from the ground up with AI as a core product capability rather than an add-on feature.
A company expanding into closely related products or markets to grow beyond its initial offering.
The pattern describing how new technologies are adopted over time by innovators, early adopters, early majority, late majority, and laggards.
The tendency for the worst deals to seek out less experienced or desperate investors, while the best deals go to top-tier funds.
The collection of successful companies a VC firm passed on investing in — a humbling record of missed opportunities.
When one party in a transaction has more or better information than the other, creating an imbalance.
The defining characteristic of venture investing: limited downside (lose the investment) with potentially unlimited upside (100x+ returns).
An informal reference check conducted through personal networks rather than through references provided by the founder.
An investment strategy combining high-risk startup bets with more stable investments to balance overall risk.
A product released to a limited audience for testing before full commercial launch.
A strategy of prioritizing speed over efficiency to rapidly capture market share, accepting extreme capital burn and operational chaos in pursuit of winner-take-all scale.
Creating uncontested market space rather than competing in existing, crowded markets.
A market sizing approach that builds estimates from actual customer data and unit economics rather than top-down market reports.
When a company grows quickly and hires too many mediocre employees, reducing organizational effectiveness.
A startup that achieves exceptional growth and market traction relative to its peers.
A startup defining a new market segment rather than competing directly within an existing one.
The dominant company in a market category that captures most of the value.
The difficulty of building a network-based product before enough users exist to make the product valuable.
The market environment of direct and indirect competitors a startup operates within.
A durable structural advantage that protects a company from competitors.
An investment approach that deliberately goes against prevailing market sentiment, betting that consensus views are wrong about a sector, company, or trend.
The step-by-step journey a potential customer takes from awareness to purchase.
Dividing customers into groups based on behavior, industry, size, or needs.
A function focused on ensuring customers achieve value from a product and remain long-term subscribers.
Investor anxiety about missing a competitive deal that appears to be attracting strong demand.
A specialized customer relationship management system used by VC firms to track, evaluate, and manage the pipeline of potential investment opportunities from sourcing through closing.
The process by which VCs identify and access new investment opportunities.
A company's ability to prevent competitors from replicating or overtaking its business.
An early customer that works closely with a startup to shape product development before broad launch.
A structural advantage in acquiring customers more efficiently than competitors.
The practice of using your own product internally to test and improve it.
A comprehensive list of items a VC reviews before making an investment, covering financials, legal, technology, market, and team aspects.
Environmental, Social, and Governance — criteria used by impact investors to evaluate companies beyond purely financial metrics.
A sales strategy focused on large organizations with complex procurement processes.
The possibility that a startup fails not because of market conditions but because the team cannot execute effectively.
Fear of Missing Out — the psychological phenomenon in VC where investors rush to invest in hyped deals to avoid being left out of potentially large returns.
The gradual addition of excessive product features that can complicate the product and dilute its value.
The competitive benefit gained by being the first company to enter a market, though this advantage is often overstated.
A self-reinforcing growth loop where each element of the business drives the next — the more the flywheel spins, the harder it becomes to stop.
A situation where founders have multiple strategic paths available (raise more capital, sell, remain independent).
The degree to which a founder's background, expertise, and personal connection to a problem uniquely position them to solve it.
A portfolio investment that by itself returns the fund's entire invested capital — typically requiring a 10-30x return depending on fund size and ownership.
The specific distribution channel used to acquire customers (direct sales, marketplaces, partnerships).
Alignment between a company's product and the channels used to sell it effectively.
The repeatable system through which a company acquires customers and grows revenue.
The plan for how a company will reach and acquire customers, including pricing, channels, and sales approach.
Rapid, data-driven experimentation to find scalable, low-cost user acquisition strategies — associated with early-stage consumer tech companies.
A self-reinforcing growth mechanism where existing users or actions generate additional users.
A strategy of prioritizing revenue growth over profitability, often fueled by venture capital, with the assumption that scale will eventually drive margins.
The complex set of decisions and strategic pathways a founder must navigate to build a successful company.
Investing with the explicit intention of generating positive social or environmental impact alongside financial returns.
An investment strategy focused on identifying companies at the point where growth is about to accelerate dramatically.
Building new companies by applying existing technology or business models to underdeveloped markets.
A periodic report sent by founders to investors summarizing company performance and needs.
Building companies by applying knowledge from one industry to another.
The process of determining whether potential customers are a good fit before investing time in the sales process.
The stages through which potential customers move before becoming paying customers.
A methodology for building startups through rapid experimentation, validated learning, and iterative product development.
Maintaining strategic flexibility for future opportunities.
Minimum Viable Product — the simplest version of a product that allows a team to collect validated learning about customers with the least effort.
Entering new geographic or industry markets to grow revenue.
A visual overview of a startup ecosystem or market segment — mapping companies by category, stage, geography, or other characteristics.
The alignment between a startup's launch and the broader readiness of the market.
A founder motivated primarily by solving a specific problem rather than financial gain — considered more credible and resilient by many investors.
A sustainable competitive advantage protecting a company from competitors.
The weekly all-partners meeting at a VC firm where new deal opportunities are presented, portfolio company updates are shared, and investment decisions are made.
The risk that someone will take greater risks because they don't bear the full consequences of their actions.
A startup expanding beyond a single core product into multiple product lines to increase revenue and defensibility.
Investing decisions influenced by compelling stories about future market outcomes rather than current metrics.
The strength of connections between users within a network product.
A strengthening of network effects as interactions between users increase.
User acquisition driven by network interactions between customers.
A growth advantage created through strong partnerships, integrations, or user networks.
The phenomenon where a product or service becomes more valuable as more people use it — one of the most powerful competitive moats in technology.
The consistent execution of processes and cost controls within a company.
Consistently strong execution across hiring, product, sales, and operations.
The percentage of a company that a VC fund aims to own after making an investment, typically used to determine check size.
Product-Market Fit — the degree to which a product satisfies strong market demand. When you have it, growth feels pull-based; when you don't, every customer feels like a push.
A VC's ability to identify success signals in startups based on experience with similar companies, teams, and markets.
A deliberate, strategic shift in a startup's product, market, business model, or core technology in response to evidence that the current direction isn't working.
A VC firm's organized approach to providing portfolio companies with operational support beyond capital, including talent, marketing, and business development resources.
The risk of building a company dependent on another platform (e.g., Apple, Amazon, Google APIs).
How much of a fund's capital sits in its largest positions, and therefore how much a single outcome can move the fund's result.
The mathematical principle underlying VC returns: a small number of exceptional investments generate most of a fund's returns, while most investments return little or nothing.
The ability to raise price without losing enough volume to offset the gain, measured by what happens to revenue per customer and retention afterwards.
Distinct product characteristics that set a company apart from competitors.
The degree to which a product satisfies strong market demand — typically evidenced by rapid organic growth, high retention, and users who would be very disappointed if the product disappeared.
A startup strategy focused on acquiring and consolidating many smaller companies in a fragmented market.
Tying a fund's or company's stated impact to named Sustainable Development Goal targets, and then measuring against them rather than against the goal logo.
The stages customers pass through from awareness to purchase.
A growth model driven primarily by outbound sales teams rather than product-led adoption.
A model whose cost of serving the next customer is small relative to what that customer pays, so revenue can multiply while costs rise slowly.
Competitive advantage gained through larger operational scale.
The stage where startups focus on rapid growth after validating product-market fit.
A structured initiative where a VC firm empowers external operators, founders, or angels to source and invest in early-stage startups on the firm's behalf.
A distortion in data or conclusions caused by non-random sampling, common in VC when analyzing success patterns.
An investor's reputation or prior success influencing other investors to participate in a round.
The market signal sent by a VC's actions — most importantly, whether an existing investor participates (positive) or declines (negative) in a follow-on round.
The danger that an investor's decision (to invest or not) sends a negative signal to the market about a company.
The rate at which a startup builds product, hires, and enters markets.
A collaboration between companies designed to accelerate growth.
Excess returns generated through unique structural advantages in how a fund operates rather than just better stock picking.
An investment strategy where an existing investor invests more than their pro-rata share in a follow-on round to increase their ownership percentage, signaling high conviction in the company.
The logical error of focusing only on successful outcomes while ignoring the many failures, distorting perceived probabilities.
A narrative used by startups to argue that their addressable market is larger than it appears today — either because they will expand into adjacent markets or because they will grow the market itself.
A competitive advantage created through proprietary technology, infrastructure, or intellectual property.
The timeline of how new technologies spread through markets.
The possibility that a company's core technology will fail or be overtaken.
Investing from a written view about a specific change in the world, then sourcing against the companies that view predicts, rather than reacting to inbound deals.
An investment approach starting with macro themes, sectors, or trends and then identifying companies positioned to benefit — opposite of bottom-up (company-first).
An expanded concept of TAM that includes additional value created through ecosystem effects.
The total potential economic value a company could capture in a market.
A startup strategy where a company breaks apart an existing platform or industry and focuses on a single component.
The ability of a company to convert market demand into revenue and profit.
The process of increasing a company's worth through revenue growth, margin improvement, or strategic positioning.
A structured roadmap outlining specific initiatives to increase a portfolio company's value during the investment holding period.
A specific milestone or achievement that causes a step-change increase in a company's valuation, such as product launch, regulatory approval, or key customer win.
The core benefit or problem a product solves for its customers.
An investment approach where the VC provides strategic support beyond capital to help portfolio companies succeed.
Pricing based on the value delivered to customers rather than the cost of production.
The speed of execution across product development, hiring, and fundraising — used as a qualitative signal of a startup team's operating rhythm and competitive edge.
An organization that creates startups from scratch using internal ideas, resources, and teams rather than investing in external founders.
A business capable of reaching very large outcomes (often $1B+ valuations).
The practice of spreading LP commitments across multiple fund vintage years to smooth returns and reduce market timing risk.
The key question a startup must answer: what has changed recently that makes this opportunity possible or necessary right now — as opposed to 5 years ago or 5 years from now.