Follow-on investment

A later investment by an existing investor in a subsequent round.

Example

Your seed fund putting $2M into your Series A.

Funds hold reserves specifically for follow-ons. An existing investor declining to follow on is a signal the next round will read carefully.

Pro-rata rights — An investor's right to invest again in future rounds to maintain their existing ownership percentage.
Reserves — Money a VC fund holds back from its total to support existing portfolio companies in later rounds.
Venture capital (VC) — Professional investors who manage a fund of other people's money and invest it in high-growth startups in exchange for equity.