Film · The screening room

Silicon Valley

Name: Silicon Valley
Director: HBO series

HBO series · 2014–2019

A sitcom that is also, unexpectedly, the most accurate depiction of term sheets, down rounds and board dynamics ever broadcast.

Why it is here

The comedy is built on genuinely correct mechanics. Episodes turn on liquidation preferences, board composition, down rounds, dilution and the difference between a valuation and money in the bank, and the plots work because the mechanics are right rather than despite it.

For a new angel it is a surprisingly efficient way to absorb the vocabulary. You will meet most of the terms in our decoder here first, attached to a situation, which is how people actually remember things.

It is also a corrective to the reverence of most startup media. The industry portrayed is absurd, self-serious and frequently venal, and the portrayal is affectionate rather than hostile — which is roughly the right register.

Read it if

You want the vocabulary and the culture absorbed painlessly over several evenings.

Skip it if

You want instruction rather than entertainment — the learning here is incidental.

Pair it withThe Social NetworkDavid Fincher (dir.)A drama rather than a documentary, and still the most watched thing ever made about founder equity disputes.

What it explains

Terms this covers

Liquidation preferenceThe right of preferred shareholders to be paid a set amount — normally the money they invested — before ordinary shareholders receive anything from a sale or winding up.Down roundA financing priced below the company's previous round, which dilutes existing holders disproportionately and typically triggers anti-dilution adjustments in favour of earlier preferred investors.Board seatA place on the company's board of directors, carrying a vote on major decisions and legal duties owed to the company rather than to the investor who appointed you.Term sheetA short, mostly non-binding summary of a proposed investment's key terms, signed before the full legal documents are drafted.

Silicon Valley: common questions

Is the finance in Silicon Valley actually accurate?

Substantially, yes. Plots turn on liquidation preferences, down rounds, board control and dilution, and they work because the mechanics are correct. It is a better introduction to the vocabulary than most deliberate explainers.

Should a serious investor watch a sitcom about the industry?

If you are new, it is an efficient and painless way to meet the terminology attached to memorable situations. If you are experienced, it is entertainment with an accurate substrate — which is more than most of the genre manages.

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