SHOULD YOUR EARLY INVESTORS ALWAYS FOLLOW ON?

Summary from the TLDR Founders newsletter

A seed investor can love your company and still skip the next round. The math may leave no other choice. A fund's $100,000 at a $2 million valuation can return 100 times at a $200 million exit. If it puts its remaining $500,000 in at a $10 million valuation, the company needs a $1 billion exit for that new money to do the same. The fund may prefer five early bets. A Series A fund that invested early for access and then passes at Series A is a different signal. Ask what earns the second check before taking the first.