Much of the common advice on follow-on investing is wrong.
Before hitting a big win, I made a costly mistake in follow-on investing that lost me $1,000,000. I’m sharing the full story so you can avoid making the same error. This was a tough lesson that changed how I approach venture investing.
The Reality Nobody Talks About
A lot of the advice on follow-on investing rests on assumptions that made sense five years ago. The world has moved on.
The first thing to understand is that the data tells a different story than your gut. I've seen this play out across dozens of companies. The pattern is unmistakable.
Many teams spend months on the wrong path before realizing that most founders overthink this and underspend on execution. Once they make the switch, everything changes.
The Counterintuitive Truth
In follow-on investing, the best practitioners often do less, not more.
The lesson: you should focus on one thing and do it exceptionally well. It sounds simple. It's incredibly hard to execute.
What I've Learned From 123 Companies
A few patterns in follow-on investing come up again and again.
The founders who handle follow-on investing well understand that you need to move fast and break things.
The AI Angle
Any discussion of follow-on investing in 2026 has to include AI. As someone who's invested in Anthropic, OpenAI, Scale AI, and Hugging Face, I have a front-row seat to how AI is transforming this space.
The short version: AI makes good practitioners better and bad practitioners worse. It's an amplifier, not a replacement.
Some teams use AI to get far more out of follow-on investing. Others spend heavily on AI that solves the wrong problem. The difference comes down to understanding what you're actually trying to achieve.
This connects to broader themes around rolling funds, secondary markets, follow-on investing, term sheets, portfolio construction that I've been thinking about a lot lately.
Final Thoughts
There are no shortcuts in follow-on investing, but there are smarter paths.
The strongest teams treat follow-on investing as a competitive advantage, not a checkbox. They invest in it early, measure it obsessively, and never stop improving.
If you're just getting started with follow-on investing, don't be intimidated. Everyone starts somewhere. The key is to start with the right mindset and the right framework, and then execute like your company depends on it. Because it probably does.
Frequently Asked Questions
Q:What would you do differently looking back?
I'd move faster on the things that were working and cut the things that weren't sooner. Most founders, myself included, hold onto failing strategies too long because of sunk cost. Speed of learning is everything.
Q:Can these results be replicated?
The specific numbers will vary, but the underlying patterns and principles are transferable. The key is understanding the context behind the results, not just copying the tactics. Every company has unique constraints that shape what works.
Q:How long did it take to see results?
Most meaningful business results take 3-6 months to materialize. Anyone promising overnight success is selling something. The companies in my portfolio that grew fastest were the ones that stayed patient and consistent.