Batchu: Top VC firms create negative signaling risks if they skip follow-ons
Sri Batchu · Wealth Creation For Employees Explained By Sri Batchu (Ramp, Instacart, Opendoor) I The Neon Show · Jun 20, 2024 · at 55:01
Tech operator and angel investor Sri Batchu discusses the trade-offs and hidden signaling risks for startup founders taking investment from top-tier venture capital firms.
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“Most top tier firms are very ruthless when it comes to their own economics. They will not Follow on or lead a subsequent round unless they really truly believe independently. That is a good decision for the company. And so a so it means just because you got the, you know, this great investor the first time doesn't mean they'll, they'll always subsequently invest. So there's some downside that, you know, there'll be negative signaling over time if the top tier fund isn't reinvesting and that's a risk that founders should think about.”
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