What is a follow-on investment?

A follow-on is an investment into a company an investor already backs, in a later round — exercising pro rata or concentrating further into winners. Funds hold 'reserves' (often ~50% of a fund) specifically for follow-ons.

Follow-on behavior is core to fund strategy and to founder diligence alike: a fund that reliably supports its winners is worth more to a founder than its first check alone. Ask any fund how it sizes reserves and decides follow-ons.