So Your VC Wants To Invest More? 5 Practical Tips For Entrepreneurs

If your VC wants to invest more in you then you have a good problem in your hands. Here are five practical ways to think about it. 1) Prorata (and Super Prorata) A prorata is the option but not the obligation of an investor to invest as much in a future round to maintain their ownership. Simple example: you raised 2 on 8 i.e., $10M post with a VC putting in $1M (10% ownership). Now you are raising 5 on 20 i.e., $25M post so that VC would want to put in additional $1.5M to have a total of $2.5M…...