A term sheet is the document that sets the key economic and control terms of a proposed investment, serving as the blueprint for closing documents. It is typically non-binding, short (usually 4 to 8 pages), is negotiated before legal counsel drafts the full agreements, sets every important number and right that will end up in the deal, and is the concrete artifact of [Lead Investor Conversion].
A standard venture term sheet covers the round size, pre-money valuation, security type (preferred stock, SAFE, or convertible note), liquidation preference (typically 1x non-participating), anti-dilution protection (almost always broad-based weighted-average), option pool size and whether it sits in pre-money, board composition, protectiv...
Due diligence is the investigation an investor runs on a startup between term sheet and closing to verify claims and surface hidden risks. The scope covers business, financial, legal, and technical risk before any money is wired. It is what turns a non-binding term sheet into a closed deal, and it is also the phase where most deals that fall apart fall apart.
A standard early-stage diligence package covers commercial diligence (market size, competition, customer references, pipeline), financial diligence (cap table accuracy, historical and projected financials, runway, burn), legal diligence (incorporation documents, IP assignment from every founder and contractor, employment agreements, prior financing documents, any litigati...
A syndicate is a group of investors who pool capital into a single deal, led by one investor who manages it for the others. The lead (called the "syndicate lead") sources the deal, conducts diligence, negotiates terms, and runs the investment on behalf of the backers. Syndicates allow individual investors to participate in deals they could not access alone and let founders consolidate many small investors into a single line on the cap table.
The modern syndicate playbook was built around AngelList, where lead investors raise per-deal funds (Special Purpose Vehicles, or SPVs) from a pool of backers and write a single check into the startup. Syndicate leads typically charge backers a carry of 15 to 25 percent on profits, with AngelL...
Founder-market fit is the alignment between a founder's background, networks, expertise, and authentic interest with the market they're building in. Investors evaluate it as a predictor of long-term execution because building a company takes 7-10+ years, and founders with deep market fit are more likely to maintain the conviction and develop the insights required to win. It's the companion concept to product-market fit and the one investors evaluate during diligence almost as carefully, sometimes more carefully than the product itself at early stages.
What founder-market fit consists of:
Domain expertise: years of experience in the market or adjacent markets. Either professional (worked at companies in the space) or perso...
Design thinking is a human-centered problem-solving methodology structured around an iterative five-stage loop of empathize, define, ideate, prototype, and test. It was popularized by IDEO (David Kelley, 1991) and the Stanford d.school (2005), and is applied to product, service, organizational, and policy problems well beyond traditional product design. It is one of the most influential methodologies in modern innovation work and also one of the most-critiqued, with serious questions raised about whether the workshop-heavy version delivers durable outcomes.
The five stages, as taught at the d.school: empathize (deep customer research, often ethnographic, to understand the human at the center of the problem), define (synthesi...
A quarterly business review (QBR) is the recurring strategic review at quarter-end covering OKR achievement, strategic initiative progress, trends, lessons learned, and next-quarter planning. Typically a full-day or multi-day session, it's the strategic equivalent of monthly business reviews (tactical financial) and weekly business reviews (tactical execution), and is distinct from "customer QBRs" (customer success meetings with key accounts) despite the shared acronym. It is the leadership rhythm that closes each quarter and opens the next.
The standard internal QBR structure (1-2 days):
Quarter review (half-day):
Indiegogo is a reward and flexible-funding crowdfunding platform launched in January 2008, predating Kickstarter by over a year. It is distinct from Kickstarter by offering both fixed-goal campaigns (all-or-nothing, similar to Kickstarter) and flexible-funding campaigns (where creators keep what they raise even if the goal isn't met), with significantly stronger international reach and a broader category mix that includes social causes and non-product projects Kickstarter rejects. Indiegogo has facilitated billions of dollars in funding across millions of campaigns since launch, though it lags Kickstarter in total funded volume and brand recognition for major product launches.
The structural distinctions from Kickstarter:
A startup is a young company built to find and scale a repeatable, high-growth business model under conditions of high uncertainty. It is distinguished from a traditional small business by its pursuit of rapid growth rather than steady-state operation, defined by what it is searching for (a working, scalable model) rather than by its age, size, or industry.
The two most-cited definitions come from the founders of the modern startup playbook. Steve Blank: "A startup is a temporary organization designed to search for a repeatable and scalable business model." Paul Graham of Y Combinator: "A startup is a company designed to grow fast." Both definitions point to the same idea, that the defining feature of a startup is the search for and...
A catch-up distribution is the waterfall tier where one party receives 100% of proceeds until reaching a target share of cumulative distributions. It is used in VC fund economics (GP catch-up after LP preferred return) and occasionally in portfolio-company liquidation waterfalls, balancing priority for one party with ensuring the other achieves its target share (e.g., GPs catching up to 20% carry). It is the structural mechanism that resolves the tension between "first money out" priorities and "fair share" ultimate splits.
The most common application: VC fund distribution waterfall.
Fund distribution waterfall (4 tiers):
Tier 1: Return of LP capital. LPs get committed capital back.
Tier 2: LP preferred return. LPs get...
Reward-based crowdfunding is the model where backers receive a product, perk, or experience in exchange for their pledge rather than equity. It is distinct from equity crowdfunding (the model used by Wefunder and Republic under Reg CF, where backers receive shares) and donation-based crowdfunding (where backers receive nothing). It is exemplified by Kickstarter and Indiegogo and most commonly used for consumer products, creative projects, tabletop games, books, and other tangible-deliverable categories. The model functions structurally as a pre-order with bonus tiers and community marketing wrapped together.
The mechanic: project creator sets reward tiers at various pledge amounts. A $25 pledge might get the basic ...