[daniel_levine]

Overall, it's a solid solution. Some hiccups: - It's common for new investors to ask about pro rata ahead of writing a term sheet (can impact the investment case/deal). - Especially in difficult times, new investors might invest under the condition that existing investors do their pro rata.

[tyre]

investors who act conditionally on other investors are the worst

(but still are the majority so you have to account for them)

as you said pro-rata can't be after the fact. The company needs to know how much equity it is selling and can't allocate to new investors without knowing what the company has available

[daniel_levine]

Agreed that they're the worst, and agreed that they are an unfortunate reality

[mrkurt]

Hopefully YC has enough power to slap firms around if they try and slip a contingency on YC pro rata into a term sheet.

[daniel_levine]

No firm does, especially in a tricky environment. That's a wild comment to make...

[himlion]

They could just announce that if such a contingency is used YC will not do the pro rata.

[sroussey]

Some investors don’t want previous investors to exercise their pro-rata. Depends.