Drive-by Deal - Launchopedia

A drive-by deal is slang term often used when referring to a deal in which a venture capitalist invests in a startup with the goal of a quick exit strategy. The VC takes little to no role in the management and monitoring of the startup. ⁹

Capital Expenditures

Exit Route

Tony Lettich

Tony Lettich has previous Business Analysis, Business Valuation, M&A, and Venture Capital experience and currently serves as the Managing Director of The Angel Roundtable and a Partner in Sheehan, Lettich M&A Advisory. He is also a co-founder of FundingSage, which provides valuable information, tools and resources to entrepreneurs seeking to launch and build startups.

Definitioner

Venture Capital / Venture Capitalist

Drive-by Deal

Venture Capitalist

A group of high net worth investors who pool their money to invest in later stage startup companies.⁶

Venture

Venture is often used for referring to a risky start-up or enterprise company.⁵

Startup

A startup is a new business venture / enterprise in its initial or early stages of development. These stages include the concept, seed, early, growth and mezzanine stages.⁶

Exit Strategy

A fund’s intended method for liquidating its holdings while achieving the maximum possible return. These strategies depend on the exit climates, including market conditions and industry trends. Exit strategies can include selling or distributing the portfolio company’s shares after an initial public offering (IPO), a sale of the portfolio company, or a recapitalization.³
This is a company’s negotiated approach whereby investors are given an event or time within the development of their company to receive their return on investment (ROI). This can be achieved through a liquidity event, where their equity is converted into cash.⁴
Exit Strategy is the way in which a venture capitalist or business owner intends to use to get out of an investment that he/she has made. Exit Strategy is also called liquidity event.⁵

Exit

Exit is the sale or exchange of a significant amount of company ownership for cash, debt, or equity of another company.⁵

INFOGRAPHICS

INFOGRAPHICS

Tony Lettich

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