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VC fundsTechCrunch
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82% Informative
Pro rata is a term that gives VCs the right to buy more shares in a portfolio company during subsequent rounds to maintain an ownership percentage and avoid dilution.
In later rounds, the new lead investor will usually get its preferred allocation.
Meanwhile, other new investors try to get what they can while existing investors have to pony up whatever the lead has agreed to pay per share.
The pro rata game is heating up, according to Bloom and Brotman .
In the first quarter of 2024 , $9.3 billion in capital was raised by VCs across 100 U.S. funds, which is just 11.3% of the $81.8 billion raised in the 2023 market.
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82
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