Follow-on investments are where most venture returns are made. Use this checklist to decide whether to double down on a portfolio company's next round.
Performance since initial investment: Did they hit the milestones from the original thesis? Engineering velocity still strong or accelerating (GitDealFlow)? Revenue/users growing as planned?
Round dynamics: Is the round oversubscribed (good signal) or struggling (bad signal)? Is the lead investor credible? Is the valuation reasonable for the traction?
Portfolio context: How much dry powder do you have? Is this company a top-3 portfolio candidate? What's your ownership if you follow on vs. if you don't?
Conviction check: Has your conviction increased, decreased, or stayed flat since the initial investment? What would need to be true for you to pass on this follow-on?