Comment by pnw
2 years ago
Not necessarily. It could also be code for "We can't write a check big enough to lead your round". E.g. a seed fund who writes $1m checks isn't going to lead a $5m round. The VC would be putting themselves out of a job if they wrote a $5m check when they told their LPs their fund target was $1m checks.
"We're in if you find a lead" is kind of notoriously code for "no".
If its a fund that has led rounds before then yes, but if its a new fund or small fund then it might be part of the GPs proving they can get deal flow to their LPs before raising a larger fund
I mean, maybe, but (a) I've been told many times that it's code, and it's like a running joke in the industry, and (b) if you have a lead, you're not worried about reading tea leaves anymore. Saying "we'll invest if you have a lead" is like saying "we'll invest if you put a successful round together". Who wouldn't? The point at which you have a lead for your round is often the point where you start turning them down.
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"We're in if you have a lead" is basically the starting point before you ever talk to a VC. Some other VC being willing to invest $5m is itself often considered a strong enough signal to invest some significantly smaller number than that while knowing literally nothing about the company being invested in. Even VCs which explicitly told you no may reconsider if you find a lead.