Does Your VC’s Fund Have the Capacity to Do Follow-on Rounds of Financing?
Another great post on TheFunded.com….
When considering a term sheet from a prospective VC, it is key to understand whether they have have the means to fund follow-on rounds. Most VCs will not do cross over funding and often startups find themselves in trouble when their VCs can not provide subsequent financing. So, it is key to determine…
If your VC’s fund is having problems (financial, political, hiring or retention, etc..) or if your VC’s fund is at the end of its lifecycle, you may ultimately experience artificial, unnecessary problems that you will have to navigate in the future while running your business. For entrepreneurs, this is a very serious issue to consider before you allow an investment, not after an investment has already taken place.
Read the rest of this article at TheFunded.com: Fund Diligence Item in order to learn the three critical questions you should ask your prospective investors before taking their venture capital dollars.