What this is
No new concepts. This combines Lessons 13-23 into one structuring decision, the same one a deal partner makes before sending a term sheet to a founder.
The deal: Northbeam Health's Series A
Northbeam (from Lesson 12's checkpoint) is now raising a $12m Series A, 18 months after your fund's seed investment. Growth has continued: $180k MRR, 14% MoM, retention still flattening above 75%.
MRR
$180k
MoM growth
14%
Proposed pre-money
$38m
Round size
$12m
Your existing stake
18%
Your task
- Sanity-check the $38m pre-money against the ARR-multiple comps from Lesson 16, is it defensible given the growth rate?
- Decide whether to exercise your seed-stage pro-rata rights (Lesson 18), and how much of your fund's reserves (Lesson 22) to commit, using the follow-on framework from Lesson 23.
- Calculate your resulting ownership under the dilution mechanics from Lesson 17, both if you exercise pro-rata and if you don't.
- Decide on liquidation preference terms for the new investor leading the round (Lesson 18), 1x non-participating is standard, would you push back on anything more aggressive?
- Decide on board composition for the new round (Lesson 19), does the new lead get a seat? Does anyone lose one?
- State, in one sentence, whether your original Lesson 12 thesis is still intact given 18 months of evidence.
| Scenario | Your action | Resulting ownership |
|---|---|---|
| Exercise full pro-rata | Invest ~$2.2m of reserves | ~18% maintained |
| Partial pro-rata | Invest ~$1m of reserves | ~14-15% |
| No follow-on | $0 | ~12%, diluted by the new round alone |
Try this yourself
Change one input at a time and see whether your decision flips:
- MoM growth has slowed to 4% instead of 14%, does the pro-rata decision change?
- The new lead investor wants a 1.5x participating preference instead of 1x non-participating, do you push back, and how hard?
- Your fund's reserves for this vintage are nearly exhausted, does that change how much you're willing to pay to defend ownership?
If you can talk through why each of these would change your answer, you're ready for the Advanced tier, starting at Lesson 25.