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.