3 reasons to maintain a follow-on allocation

The main topic of the article is the importance of follow-on investments in venture capital. The key points are:

1. Follow-on investments increase the chances of a successful next financing round and show that the initial investors believe in the portfolio company.
2. Not reserving capital for follow-on investments can send a negative signal to potential investors.
3. Venture capital involves many unpredictable risks, making it difficult to accurately estimate a company's runway.
4. Without enough capital for follow-on investments, earlier investors may be more diluted in future funding rounds.