Strategic approaches to portfolio construction, investment thesis, and fund management.
186 terms
A company built from the ground up with AI as a core product capability rather than an add-on feature.
The concept that an impact investment generates social or environmental outcomes that would not have occurred without that specific investment, beyond what the market would have delivered anyway.
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.
A portfolio construction approach where one or two large initial investments anchor the fund, providing stability while smaller bets provide upside.
The collection of successful companies a VC firm passed on investing in — a humbling record of missed opportunities.
A business model that minimizes physical assets and capital expenditure, relying instead on software, platforms, or third-party infrastructure.
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 structuring approach that combines concessionary capital from development institutions with commercial capital from private investors to fund ventures in underserved markets.
The combined cost of acquiring knowledge about a market through both direct investment losses and indirect research expenses.
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.
An organization that builds and launches Web3 startups from scratch using internal teams and resources, typically retaining significant equity and token allocations in each project.
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.
The reputational risk a VC firm faces from being associated with controversial or failed portfolio companies.
A startup that achieves exceptional growth and market traction relative to its peers.
Patient, risk-tolerant capital that accepts below-market returns or higher risk to enable impact investments that would not otherwise attract commercial funding.
A startup defining a new market segment rather than competing directly within an existing one.
A company that defines and dominates an entirely new market category rather than competing in an existing one.
The dominant company in a market category that captures most of the value.
Excess investment returns generated specifically from climate-related opportunities, driven by regulatory tailwinds, technology shifts, and increasing demand for decarbonization solutions.
When a fund claims to be actively managed but its portfolio closely mirrors a benchmark index, delivering index-like returns at active management fees.
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.
The governance-driven process of managing a decentralized autonomous organization's financial reserves, including budgeting, diversification, and capital allocation decisions.
An investment approach using decentralized finance protocols to generate returns through lending, liquidity provision, staking, or yield farming with fund assets.
A temporary recovery in a declining company's performance or valuation before it continues downward — a false signal of recovery.
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 venture fund specializing in companies built on substantial scientific or engineering innovation rather than business model innovation.
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 venture fund focused specifically on investing in technology companies that serve the healthcare industry, from telemedicine to health data analytics.
When a smaller company with fewer resources successfully challenges established incumbents by targeting overlooked segments.
A portfolio company in financial difficulty — low runway, declining metrics, or inability to raise additional capital at acceptable terms.
Debt securities of companies in financial difficulty, trading at significant discounts to face value, which can be purchased as an investment strategy.
A structural advantage in acquiring customers more efficiently than competitors.
A competitive advantage derived from superior access to customers through unique distribution channels.
The practice of using your own product internally to test and improve it.
An investment philosophy that evaluates success based on both financial returns and social or environmental impact, treating both as equally important objectives.
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.
Hidden options within a VC investment that could create additional value beyond the primary thesis, such as adjacent markets, platform expansion, or strategic value.
The investment approach pioneered by Yale's David Swensen that allocates heavily to alternative assets like venture capital, private equity, and real assets for superior long-term returns.
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 company that owns the complete value chain in its industry rather than providing tools to existing players.
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.
An investment strategy that intentionally incorporates gender-based analysis into investment decisions to advance gender equity while generating competitive financial returns.
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.
Building a new operation or company from scratch rather than acquiring or investing in an existing one.
An investment strategy that blends venture capital's growth orientation with private equity's focus on profitability and operational efficiency.
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.
A fund's articulated framework for how its investments will generate measurable positive social or environmental outcomes alongside financial returns.
A spectrum describing whether an impact investor prioritizes social/environmental outcomes or financial returns when the two objectives conflict.
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.
The formal decision-making workflow within a VC firm for evaluating and approving new investments, typically involving multiple stages of review by the partnership.
A periodic report sent by founders to investors summarizing company performance and needs.
The principle that the shift to a low-carbon economy should be fair and inclusive, ensuring that workers and communities dependent on fossil fuel industries are not left behind.
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.
A venture investment strategy focused on publicly tradeable tokens and digital assets rather than traditional illiquid private equity stakes.
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.
The gap between an investment's price and its estimated intrinsic value, providing a buffer against errors in analysis.
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.
An investment approach that relies primarily on quantitative data and KPIs rather than qualitative judgment or narrative.
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.
An investment style that prioritizes investing in companies showing strong recent growth, regardless of valuation — the opposite of value investing.
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.
A SaaS infrastructure where multiple customers share a single instance of the software.
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.
A competitive advantage that strengthens as more users join a platform, making it increasingly difficult for competitors to displace the incumbent.
The consistent execution of processes and cost controls within a company.
Consistently strong execution across hiring, product, sales, and operations.
The evaluation of what returns or value are forgone by choosing one investment or action over the next best alternative.
A strategy combining Qualified Opportunity Zone Fund benefits with venture investing, allowing investors to defer and potentially reduce capital gains by investing in startups located in designated zones.
The value of having multiple possible paths forward, allowing a company or investor to choose the best option as information unfolds.
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.
The stage where a product strongly satisfies market demand and grows organically.
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.
In PE/growth context, an initial acquisition that serves as a base for adding complementary bolt-on acquisitions.
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).
The strategic framework for determining a fund's optimal number of investments, check sizes, reserve ratios, and ownership targets to maximize the probability of generating strong returns.
Active management of a fund's portfolio to maximize returns through follow-on decisions, exits, and resource allocation.
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 of a company to raise prices without losing customers.
Distinct product characteristics that set a company apart from competitors.
A self-reinforcing cycle where product usage generates data, network effects, or content that makes the product better, attracting more users.
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.
The statistical tendency for extreme performance (very high or very low) to move toward average over time.
The percentage of a fund's committed capital set aside for follow-on investments in existing portfolio companies, typically 30-50% of total fund size.
A startup strategy focused on acquiring and consolidating many smaller companies in a fragmented market.
The practice of mapping an investment fund's or portfolio company's impact to one or more of the UN's 17 Sustainable Development Goals.
The stages customers pass through from awareness to purchase.
A growth model driven primarily by outbound sales teams rather than product-led adoption.
A business model capable of growing revenue much faster than costs.
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 distinction between metrics and signals that reflect genuine business health versus vanity metrics that look impressive but don't predict outcomes.
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 information conveyed to the market when a known investor participates in or passes on a funding 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.
When a fund deviates from its stated investment strategy, such as investing outside its target stage, sector, or check size.
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 detailed description of the ideal startup a fund seeks to invest in, including stage, sector, metrics, and team characteristics.
A competitive advantage created through proprietary technology, infrastructure, or intellectual property.
An evaluation of a startup's technology stack, code quality, architecture, scalability, and technical team capabilities conducted as part of the investment due diligence process.
The timeline of how new technologies spread through markets.
The possibility that a company's core technology will fail or be overtaken.
The set of software tools and frameworks used to build and run a product.
A detailed model mapping how an investment or intervention leads to intended social or environmental outcomes through a chain of causal steps and assumptions.
An investment approach where the fund develops a specific thesis about market trends and proactively seeks companies that fit.
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.
An expanded framework evaluating business and investment performance across three dimensions: financial profit, social impact on people, and environmental sustainability.
A startup strategy where a company breaks apart an existing platform or industry and focuses on a single component.
An investment strategy focused exclusively on finding and investing in potential unicorn companies (those likely to reach $1B+ valuation).
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.
An underserved market opportunity with limited existing competition.
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.
The percentage of sales opportunities that convert into paying customers.
The tendency for the winning bidder in a competitive process to overpay because they have the most optimistic valuation.
A market where a single dominant company captures the majority of value.
The concept from Peter Thiel's book describing true innovation — creating something genuinely new (0→1) rather than incrementally improving what already exists (1→n).
A budgeting approach where expenses must be justified from scratch each period rather than carried forward.