Posted: 2020-08-02 21:13:05

Inside Rounds Have Become a Sign of Strength at the Series B

Originally published 2020-08-02
However, Series B data suggest insiders are leading aggressive rounds into compelling businesses. Witness the red line in this Series B Mean chart. Inside rounds have skyrocketed. Last year, inside rounds were 28% smaller than outside rounds. In 2020, they are 40% larger, a $33M swing in round size.
As I wrote in the previous post, this is happening because investors are adjusting to a virtual environment. Diligence completed almost entirely over video is new. If you trust a team, if you understand a company well, if you enjoy information asymmetry from a board seat, and if you’re less comfortable with remote diligence, pre-empting the Series B is very rational. Especially with so many early-stage funds raising opportunity funds and LPs seeking direct co-investments.
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Tags:inside round,outside round,round size,new investor,large round,series b,investor,territory of company,median round size,inside series b
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