VC Lingo Dictionary

Is this meant literally?  It depends. This term can mean: let’s keep a line of communication open for when the company is more advanced on product, revenue, valuation. VCs can have specific preferences regarding maturity/growth stage of businesses they invest in. This can be due to requirements in how the fund is set up and where the money it is investing comes from. But the term frequently is meant as ‘no interest’ and sometimes as a soft rejection.

Tone: neutral-negative

Is this meant literally?  It depends. VCs have internal procedures to get to a view on what they think about a company e.g. do they believe it can be successful, is it a big and growing market, is it complementary or competing with the existing portfolio of companies they have already invested in. It may take VCs 1-3 weeks to get back while they are going through this early due diligence process. VC teams have regularly scheduled internal discussions where they decide to advance or not. The final one is the so-called investment committee (IC), which typically takes several weeks and even months to get to.

But these terms are lukewarm and often used as a way to signal no interest without closing the door. These terms can also be positive, but non-committal, if the VC wants to move forward but needs an internal buy-in first. It can also mean that the VC wants to first see how the round is shaping up, and whether other VCs are interested (see FOMO)

Tone: neutral

Is this meant literally?  It depends. These things are all related to validation and derisking. These terms typically mean measurable things such as money in the bank, contracts signed, user or customer growth. VCs often have internal thresholds that a deal needs to hit in order to be sure that it will get a sign off from the investment committee. Since it refers to something measurable, the answer leaves the door very explicitly open to connect back whenever the measurable thing has happened.

But they should indicate what “more” means to them (so you know when to connect back once you have reached x revenue, users, or customers). If you are left not knowing what “more” actually means, it may also be a way to say no interest without saying “no”.

Tone: neutral-negative

Is this meant literally?  In principle yes. The term “progress” typically means measurable things such as revenue, user or customer growth. Since it refers to something measurable, the answer leaves the door very explicitly open to connect back whenever the measurable thing has happened. And the ask for an update signals explicit interest.

Tone: neutral-positive

Is this meant literally?  It depends. Yes: VCs weigh risk vs. potential return and, to make an investment decision they need to understand where risk and returns come from and how to gradually eliminate vs increase them respectively. “A bit early” may say more about how a VC thinks about risk and ROI than it says about you. This answer may leave the door open for the future, when you are more advanced on derisking and commercializing the company.

But even at early stages VCs will have some sense about whether what you are doing is interesting and likely to be successful. This term, unless it is accompanied by other terms that make it more explicit that the VC wants to stay connected, is used as a way to signal no interest without saying no. (similar to “we need to see more traction”)

Tone: neutral-negative

Is this meant literally?  Probably not. Yes: VCs typically have an investment thesis that guides their investment decisions. This can be more or less defined in relation to things such as type of technology, growth stage, industry, geography. Example: from as broad as “hardware” to as detailed as workflow orchestration for genAI. This thesis depends on things like what they know, how they see the market, what they have worked on, invested in previously, and made and lost money on in the past, and who has invested in their fund. It is possible that your company falls completely outside of all these things. It can also mean that the junior VC is excited but could not get the more senior VCs excited about the project.

But to meet with you in the first place there will typically be something about your company that falls within the investment thesis. The term is frequently used as a way to signal no interest without saying “no”.

Tone: neutral-negative

Is this meant literally?  Probably not. Yes: VCs typically have specific areas they invest in, for example type of technology or industry (deep tech, fintech, consumer goods, energy) or specific business model (SaaS, IP licensing). The focus depends on what VCs know, how they see the market, what they have worked on, invested in previously, made and lost money on in the past, and who has invested in their fund. It is possible that your company falls completely outside of that focus (e.g. you may just not be a clean tech company and that is the premise on which they raised the fund on)

But to meet with you there will typically be something about your company that falls within that focus. The term is frequently used as a way to signal no interest without saying “no”.

Tone: neutral-negative

Is this meant literally?  Possibly yes. VCs typically have a model/ investment thesis that guides their investment decisions. This can be defined in relation to things such as type of technology, growth stage, industry, geography, life of the fund (most funds tend to be set up for 10-12 years), what they know, how they see the markets, what they have worked on, invested in previously, made and lost money on in the past, size of the fund and who has invested in their fund. Especially the size of the fund and who has invested in it can operationally restrict how the fund makes investments.

But the term is also frequently used as a way to signal no interest without saying “no”.

Tone: neutral-negative

Is this meant literally?  Yes. It’s a bit of a convoluted way of saying that there was not enough convincing input to sway the VC to write a check. In practice it means that the VC voted down the investment in the internal investment committee meeting because not all investors agreed to go ahead. This can be related to a few or many things: from product, market, team, customers, to gut feeling and chemistry.

The term is a clear no. And many VCs will not be clear on what it was that stopped them from investing. Often this comes after having spent time and effort to evaluate a company, so tends to be a definite no. On occasion it can be wrapped into a future perspective – e.g. if x or y aspects are addressed/changed.

Tone: negative

Is this meant literally?  Possibly yes. Ticket (or “check”) refers to investment size. VC funds are vehicles to make money. VC mechanics mean that the mathematics of investing need to check out for every investment. Some VCs want to stay invested in a company through growth stages, so the investment size and corresponding equity need to be large enough for the fund to make money, to not get too diluted. The mechanics of VC dictate that because most investments fail, every investment should have the potential to return the fund (i.e. do the math of comparing the fund size to the return your company can make, and see if it can even match). It can also be the case that the investment size exceeds what the fund is able to invest per deal. Also, different funds are willing to take different levels of risk, i.e. some VCs may not be willing to invest pre-revenue.

But if the return mechanics work out and a company is doing something really interesting, then most VCs can find a way of investing smaller/at lower equity than they typically would.

Tone: neutral-negative

Is this meant literally?  Not really. Yes: there are so-called “zombie” funds that have invested all their money and are not able or willing to fundraise more with investors, the so-called Limited Partners (LPs). These funds may meet with companies in an effort to show that they are still active. But they would not tell you or anyone in the face that they are no longer investing/have run out of money. These are expressions that signal no interest.

Tone: negative

Is this meant literally?  Yes, but not in the fire sense. This means the investor or fund have had a bad experience related to the technology, industry or market. Bad experience can mean that a company they invested in in the past failed, e.g. because the market did not materialize, or demand did not build up fast enough.

This term may say more about the investor’s approach than about your company’s potential. But you are up against at least one and potentially several people who do not believe that money can be made with what your company does.

Tone: negative

Is this meant literally?  Yes. This term means that based on what the VC calculated given your company’s and their fund’s position, they expect to not be making (enough) money if they invest. This can be about them (returns they are expected to make, how much they believe in a market) or about the company’s financials, market position, and growth potential.

But often this term means: would love to invest if it were possible to get more equity cheaper. So the question may be around how much equity you are willing to give up to give them a better deal.

Valuation in early stage tends to be highly dependent on FOMO.

Tone: neutral

Is this meant literally?  Absolutely. FOMO stands for fear of missing out.

While VCs will tell you they make decisions based on facts and data, the truth is that many investment decisions are heavily skewed by fear of missing out on a potentially lucrative deal. Especially with early-stage companies where a lot is around assessing potential. The good news is that FOMO can be used as a tool to get several competitive offers from VCs meaning a sort of bidding environment that can result in high valuations. The bad news is that VCs tend to pile up around the competitive deals so they will be saving their cash for those investments vs considering to invest if the situation is not competitive.

Tone: from super positive to super negative

Is this meant literally?  No. These are polite expressions of signaling no interest.

Tone: negative

Is this meant literally?  Yes, these are positive terms, unless followed by “but”.

Tone: positive

Is this meant literally?  In principle yes. These are slightly inflated terms but all positive.

Tone: positive

Is this meant literally?  No. But these are terms with a positive connotation for startup performance or growth potential. The most commonly known is the “unicorn” = privately held company with $1billion+ valuation. Minicorns and Soonicorns are “young unicorns” that based on milestones, growth or traction are expected to become unicorns. Minicorn = valuation between $1million and $1billion. A centaur = $100million annual recurring revenues (ARR).

Tone: positive

Is this meant literally?  No. But it can mean anything from very positive to very negative depending on context. In a positive context a moonshot can mean a company with a significant, transformative impact that has the potential to revolutionize an industry or create an entirely new market. This is positive because it can generate outsized returns. In a negative context this translates to overly ambitious, unrealistic or unachievable. That would equate to a startup that is set to fail and generate zero returns.

Tone: from super positive to super negative