The best advice I ever got about what i wish founders knew about follow-on investing came from a founder who'd failed at it three times.
Having been both a founder and a VC, I know firsthand how confusing follow-on investing can be. I’m here to share the behind-the-scenes truths and what investors are really thinking when they offer you that deal.
The Framework That Actually Works
I'm going to share the exact framework I use when evaluating what i wish founders knew about follow-on investing. It's not complicated, but it requires discipline.
Step 1: most founders overthink this and underspend on execution This is where most people go wrong. They skip this step entirely and jump straight to execution. Don't do that.
Step 2: you should focus on one thing and do it exceptionally well Once you have the foundation right, this becomes much easier. I've watched founders struggle with this for months when the answer was staring them in the face.
Step 3: Iterate relentlessly Nothing works perfectly the first time. The companies in my portfolio that nail what i wish founders knew about follow-on investing are the ones that treat it as an ongoing process, not a one-time project.
The Reality Nobody Talks About
Most people approach what i wish founders knew about follow-on investing with assumptions that made sense five years ago. The world has moved on. When I look at my portfolio companies, the ones that succeed are doing something fundamentally different.
The first thing to understand is that you need to move fast and break things. I've seen this play out across dozens of companies. The pattern is unmistakable.
At RemoteTeam, we learned this the hard way. We spent months going down the wrong path before realizing that timing is everything in this game. Once we made the switch, everything changed.
What I Tell Founders
When a founder in my portfolio asks me about what i wish founders knew about follow-on investing, I usually start with three questions:
- What's your timeline? Because the right approach for a company with 6 months of runway is very different from one with 3 years.
- What have you already tried? Most founders have tried something. Understanding what didn't work is often more valuable than knowing what might.
- Who on your team owns this? If the answer is "everyone" or "no one," that's your first problem to solve.
These questions seem simple but they reveal a lot about where a company actually stands.
This connects to broader themes around follow-on investing, portfolio construction, dilution that I've been thinking about a lot lately.
The Bottom Line
Look, what i wish founders knew about follow-on investing isn't rocket science. But it does require intentionality, consistency, and a willingness to learn from mistakes.
If you take one thing from this article, let it be this: start now, start small, and iterate. The founders who win at what i wish founders knew about follow-on investing aren't the ones with the best strategy on paper. They're the ones who execute, learn, and adapt faster than everyone else.
I've been doing this for over a decade. The patterns are clear. The companies that take what i wish founders knew about follow-on investing seriously outperform the ones that don't. Every single time.
If you're working on something interesting in this space, I'd love to hear about it. Drop me a line.
Frequently Asked Questions
What experience informs this perspective?
This perspective comes from over a decade of building companies in Silicon Valley, two successful exits (RemoteTeam to Gusto, MovieLaLa to Gfycat), and investing in 200+ startups including Anthropic, OpenAI, and Scale AI. I write about what I've lived.
What's the most common pushback you get on this?
People often push back by citing exceptions or edge cases. And they're usually right that exceptions exist. But building a strategy around exceptions rather than patterns is a losing game for most founders.
How can I apply this thinking to my own situation?
Start by identifying the core principle behind the opinion, not the specific example. Then ask yourself: does this principle apply to my context? If yes, test it in a small, low-risk way before going all in.