A "pay to play" provision in an early investor's term sheet forces them to commit to investing more in future rounds or they get crammed down. It can leave a bad taste in early investors' mouths because it implies future fundraising will not be advantageous. The phrase has taken on another insidious meaning in the last couple of years thanks to questionable fundraising forums that charge startups to pitch. Most reputable pitchfests in front of top-tier VCs or bona fide angel groups charge nothing. Even pitchfests organized by groups like VC Task Force and various incubators charge only nominal amounts. The free and cheap venues are worth my time. A so-called venture investing forum that requires a startup to pay to play, specifically thousands of dollars up front, is not going to get any money from me.
The "smash and grab" is less well known. It is an acquisition performed by institutional investors who seek to buy a startup as quickly as possible. It sounds straightforward, but the acquirer may have performed just enough due diligence to realize the startup has something very valuable that they want to buy cheaply. The strategic intent is to grab the startup's assets (possibly some unique IP) or just take the startup out of the market if it threatens the acquirer's business lines. A naive startup founder can get taken by a major investor dangling a few hundred thousand dollars in the air for a quick buyout. The early investors should intervene and help the company stay the course to a higher valuation.
I find both of these techniques distasteful. They do not treat early-stage investors fairly. The venture investing community can be prey for sharks sometimes. On a related note, some folks operating in startups make themselves easy pickings out of ignorance or laziness. I overheard one idiot at a recent conference make this comment: "Hey, Facebook bought something like 200 companies this year. That's like one every week, dude." Yo, dude, please redo your math on that one. If he's my competition, investing should be a walk in the park for me. If he's running a startup, he won't get my money.