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Founder: "What happens if we sign the allocation agreement and then a VC wants to invest the entire round or nothing?"

Founder Questions

Founder: "What happens if we sign the allocation agreement and then a VC wants to invest the entire round or nothing?"

Response discussion guide when communicating with the founder.

Last updated on 07 Feb, 2023

This is where your relationship with the founder is important, they should want to fight for you to have your allocation. You may want to say something like:

"A good VC that is founder friendly should understand the value of Angels on a startup's cap table and be willing to make space for them in the round. If you find that a VC is keen to take your entire round, that's a great spot to be in, but you can let them know that it's important for your growth strategy to have champions and subject matter experts that you can tap into. You can let them know that you have already agreed to provide an allocation to a strategic lead angel (me), who you have a strong valuable relationship with, and it wouldn't be in your company's best interest to cut them out."

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