venturecapital

Interesting new fund strategy: buying seed stage funds’ pro rata rights

Interesting new fund strategy: buying seed stage funds’ pro rata rights

https://techcrunch.com/2024/07/07/pro-rata-seed-vcs-funds-venture-capital/

Building something new. 🟪 Host: /venturecapital /adventures /theitinerant

I’d be curious to know how these firms do portfolio construction. I would imagine it’s much less predictable

By definition they are price takers as they are not setting term sheets so target ownership can't be as strict. And the investable universe of breakout startups where the pre-seed/seed will be able to fight their pro-rata and where the lead actually "allows" for it might not be big. That's why they end up investing in Series B, C, D follow-ons which make setting target valuations less predictable.