# What is Follow-On?

A later investment in a company the investor already backs. Funds hold part of their money in reserve for it, so they can add to companies that are doing well and limit dilution of their stake.

## In real work

The fund kept 40 percent of its capital in reserve, which let it make a follow-on investment when the lab-scheduling startup raised its Series A.

## Related terms

- [SAFE](https://prompthausapp.com/learn/safe.md)
- [Valuation Cap](https://prompthausapp.com/learn/valuation-cap.md)
- [Dilution](https://prompthausapp.com/learn/dilution.md)
- [Pro Rata](https://prompthausapp.com/learn/pro-rata.md)
- [Limited Partner](https://prompthausapp.com/learn/limited-partner.md)

## How is this different from Googling it?

Google gives a definition. Prompthaus pairs each term with how it shows up in standups, PRs, prompts, and design reviews. Then it quizzes you until the word sticks. One term a day on iPhone.

- Category: Venture
- HTML: https://prompthausapp.com/learn/follow-on
- App Store: https://apps.apple.com/us/app/prompthaus-ai-vocabulary/id6776314407