Startup Funding

Is it common for Series A funders to get first right to Series B

Laura Cameron Experienced in operations, finance, management, startup, and fundraising

August 11th, 2020

Is first right an additional attraction for Series A funders?

Dane Madsen Organizational and Operational Strategy Consultant

August 11th, 2020

It is not uncommon - but it isn't an "attraction" so much as a term they will include if it is their process. If it is important to them and they are making an investment, then it will be in the term sheet. If they are not making an investment and you offer it, it will make zero difference.

This is different than the pro rata rights nearly all investors will demand. In neither case does it obligate them to make a further investment.

Jett T. Angel investor, startup advisor, entrepreneur, ideator, engineer, published author, producer, ...

August 11th, 2020

If you are talking about pro-rata rights ( the right to participate in a subsequent round of funding to maintain their level of percentage ownership in the company ), then yes this is quite common.