VC terms you need to know

As a founder, the goal then becomes to metaphorically peel each layer of the onion — Each fundraising milestone turning into a set of risks being evaluated and sidelined. The earliest investors become the partners to help figure out what to focus on. Good pre-seed angels and investors are often described as “having taste” for good startups — In tru... See more

Many crypto startups raise traditional venture capital to fund product/market fit discovery, often under a Simple Agreement for Future Tokens (SAFT), a structure developed by Protocol Labs and Cooley that’s similar to Y Combinator’s SAFE, except that it converts into tokens instead of equity should the company issue tokens in the future.

The best example of this alternative product is Indie.VC, run by Bryce Roberts. Over the course of 6 years, Indie invested in 40 companies. It held the two key components of limited fund size and gave equity optionality through redemption clauses or equity buybacks. The results are encouraging, with a 51% IRR and 4.3x TVPI, while 87% of the compani... See more

-Startups have always had the ability to raise vast sums of money with promises of future profit: a decent diagramm on a napkin might solicit $2M from VCs in actual capital as well as an additional $10M of phantom capital known as “equity” for a $12M valuation. Social tokens allow anyone to raise this way without needing VCs to dictate terms. And i... See more

One answer is what we might call a work-to-play model, in contrast with the traditional concept of ‘pay-to-play’. Instead of valuing LPs who can give the most money—an easy commodity for many founders in an overcapitalized environment—syndicates could work to value those who can actually contribute ideas, expertise, and work to support the companie... See more

In the past two years, Tiger has developed an entirely unique investment platform in venture/growth based on Maximum Deployment Velocity and Better/Faster/Cheaper Capital for Founders. These two pillars represent the most significant development in venture strategy since the advent of the growth fund7, and the best way to explain their significance... See more

Finally, another common approach is to back into the required fund value to guarantee a Net LP return multiple (i.e. net of fees and carry). For e.g. for a $100M fund to return 3x net to its LPs given the standard 2 and 20 model and $850K in total fund expenses, the total net return for the fund would have to be $370M after taking into account the ... See more