VC Vocab

• Understand loaded terms in VC, like "tools business", which implies difficulty in defensibility and scaling.
• Recognize that common words can have hidden meanings in startup contexts.

Cleaning up the cap table involves adjusting equity distribution, sometimes controversially like with Eduardo Saverin in "The Social Network". This differs from a cram down/recap, which focuses on investor-side restructuring during struggles.

David Rosenthal describes "sideways" companies as those with steady, small growth (10-20% annually), requiring significant effort but yielding low venture returns. These businesses represent a common, yet often overlooked, middle ground in venture portfolios.