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Re:Sequoia’s Leone: In Venture, Big is the Enemy of Great by panabee on Tuesday December 11, 2012 @03:04AM (#4903609)
the downside comes when you need to raise money from VCs. if the larger VC -- which made a proxy investment via the angel scout -- does not invest in you again, it becomes a red flag for other investors. this grants the larger VC more leverage during negotiations because you effectively need the VC to participate, or else risk scaring away other VCs. this assumes the other VCs know the angel scout is a proxy for the larger VC.

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