Tranched rounds is the idea that an investor will commit to a total financing and give out portions as the entrepreneur achieves certain milestones. A tranche is ultimately a negotiation and there isn’t a fixed amount or metric around it. As you would expect what typically happens is 50% now, 50% later, with the latter being an operational target say around number of users or revenues. There are obvious reasons why VCs would want tranches, the pitfalls are more detrimental to entrepreneurs. Tranches happen much more commonly in emerging ecosystems, whether by vertical (for instance biotech rather than tech) or…...
Startups, VCs and Tranched Rounds? Yes Sometimes, No Mostly
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