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with tagdilution
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General VC Questions
dilution follow on pro rata

If I make an investment in Fund I with no follow-on reserves, can I follow on that investment in Fund II using the pro rata rights from Fund I?

Asked by: Rowena Luk
1
0
Jun 19, 2024

Fund I has no reserves and is investing in Seed stage.  In future, I hope to establish a Fund II with follow-on reserves, investing in Seed plus Series A.  If I get pro rata rights from my investments in Fund I, can I use those rights to invest using the new Fund II? 

Top answer:

The best practice is to offer that pro-rata to fund 1 LPs first via SPVs. Next, bring the investment to your LPAC to clear any conflicts. Then, make the investment. 

 -  Mike Suprovici
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1
Venture Deals
conversion vent series A dilution post money safe

Does a post money SAFE got diluted with the Series A?

Asked by:
Community Member
1
0
Mar 14, 2024

I would like to know the step-by-step process. Scenario: I invested in the pre-seed round via a post-money SAFE of $100k at a $1M post-money CAP valuation. The startup reached Series A and raised $5M at a 50M valuation. How much company participation do I owe after the Serires A transaction is closed? 10%? Do I have the same preferred stocks that the company issued for the Series A investor(s)?

Top answer:

There are a lot of factors at play here. For example, if the company raised an additional SAFE after your investment, the dilution scenario will be different. It also depends on the terms of the Series A. Consider using this Cap Table an...

 -  Mike Suprovici
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