Pro rata rights have long been a standard feature of venture capital deals, but a new startup dispute has sparked debate over whether that should change.

• On one side are fiduciaries. On the other are founders and the founder-friendly.

Terminology: Pro rata rights give existing investors the opportunity, but not the obligation, to purchase a proportional share of new stock in future fundraising rounds (albeit at the new, usually higher, price).

• They're also the namesake of a terrific newsletter that you should share with colleagues and random acquaintances.

Driving the news: A nuclear startup named Valar Atomics has sued one of its early investors, Day One Ventures, for trying to enforce their pro rata rights over the company's objections.

• For context, Day One invested in Valar's seed, Series A and Series A extension rounds. The dispute arose on a Sequoia-led Series B round that valued the company at $6 billion.
• Rather than suing quietly and hoping no one would notice, Valar CEO Isaiah Taylor blasted Day One via social media, which of course prompted a response from firm founder Masha Bucher. Thus the ensuing public debate.

The big picture: There are two issues here. The first is a legal one specific to Valar vs. Day One, which Delaware Chancery Court will settle.

• The second is more existential for the future of venture capital as it relates to the future of pro rata rights.

Zoom in: For starters, it's worth recognizing that pro rata rights currently appear in the vast majority of early-stage venture deals. They also are included in the NVCA's model legal documents.

• Supporters argue that early investors take outsized risks and that such protections get priced into the transaction (much like preferred shares). Moreover, pro rata rights are an early-stage investing engine — often returning entire funds — because they allow funds to double down on winners within portfolios that are chock full of failure.
• Opponents argue that pro rata rights only serve to stir conflict — if an investor has proven useful beyond their money, then founders will gladly invite them into future rounds. What's paramount is what's best for the company, which sometimes means diluting early investors for the sake of a deeper or more strategic pocket.

Behind the scenes: The reality is far less binary, as contractual terms often are the starting point for negotiations between founders and existing investors.

• Founders don't want to be known for breaching contracts, while investors don't want to be known for playing hardball. Both have future business relationships to consider.
• One new wrinkle, however, is that some founders are getting pressured on pro rata by growth-stage firms that need to put their billions to work, including via rounds that are tranched by valuation.

The bottom line: Venture capitalists have evolved from firing founders to being their binkies.

• Eliminating pro rata rights, however, might not be as founder-friendly as it appears — possibly reducing the number of early-stage VC funds and, in turn, opportunities for future founders.

Bending Spoons yesterday secured a $330 million investment from existing shareholder Berkshire Hathaway.

Why it's the BFD: The Italian software conglomerate, known for buying legacy brands, now has more dry powder for M&A.

• Its shares also jumped more than 41% on the news, hitting an all-time high.

Catch up quick: Berkshire Hathaway, now led by Greg Abel, first backed Bending Spoons in July, investing $600 million at IPO. Its stake is now around 4 percent.

The bottom line: Hard to see software-averse Warren Buffett having done this deal.

• Anduril plans to launch a $1.3b employee tender at a $90b valuation, per Bloomberg.

• Ramp, a corporate spend management platform, raised $1.85b at a $60b valuation. Dragoneer Investment Group led, joined by Thrive Capital, Founders Fund, Sands Capital, Avenir Growth, Capital International, Fidelity, T. Rowe Price, D1 Capital Partners, Greenoaks, Iconiq, GIC, 8VC, 1789 Capital, Alpha Wave Global, Ontario Teachers, Coatue, D.E. Shaw, Definition Capital, FirstMark, General Catalyst, Generation Investment Management, Glade Brook Capital Partners, Khosla Ventures, Lightspeed, Pinegrove Opportunity Partners, Soma Capital, and Stripes. axios.link/4B7d2RX

🚑 Abby Care, a home-care startup that trains family members to become caregivers, raised $82m in Series C funding, per Fortune. Transformation Capital led, joined by CVS Health Ventures, Frist Cressey Ventures, and Pivotal Ventures and insiders Khosla Ventures, Thrive Capital, and Sequoia Capital. axios.link/4imO75B

🚑 OMass Therapeutics, a U.K. biotech that uses structural mass spectrometry, raised $310m in Series C funding. Bain Capital Life Sciences, Forbion, and Novo Holdings led, joined by Janus Henderson, SV Health Investors, Jefferson Life Sciences and insiders Syncona, Oxford Science Enterprises, GV, Northpond Ventures, Sanofi Ventures, British Patient Capital, and University of Oxford. axios.link/4yqX8j0

• North, an NYC-based cloud spend startup, raised $60m in Series B funding, per Axios Pro. PeakSpan Capital led, joined by Litquidity, Companyon Ventures, Alpaca, Uncommon Denominator, Gaingels, and Mana Ventures. axios.link/4B6DmMf

• ZenZap, a workplace messaging app, raised $44m from Bessemer, Lightspeed, and The Garage. axios.link/4i0iAFa

🚑 Altay Therapeutics, a San Carlos, Calif.-based developer of transcription factor small molecule inhibitors, raised $37m in Series A funding. Sound Bioventures and HealthCap led, joined by Fountain Healthcare Partners, Biogen New Ventures, Pappas Capital, and Global BioAccess Fund. axios.link/4sdQcUY

• Sunbound, a Phoenix-based provider of back-office solutions for senior living operators, raised $24m in Series A funding and acquired billing firm Richter Healthcare Consultants, per Axios Pro. TTV Capital led, joined by Bling Capital, Fika Ventures, Live Oak Bank, and Ziegler Linkage Fund. axios.link/4zAN8oh

• Sharp Performance, a coaching platform for first responders, raised $18m in Series A funding, per Axios Pro. Hidden Variable led, joined by a16z, Commonweal Ventures, Wolfson Group, FJ Labs, and Ford Foundation. axios.link/4i5npgJ

• CarbonAI, a CRE loan underwriting platform, raised $12m from Cowboy Ventures, Bling Capital, Max Ventures, and Timber Grove Ventures, per Axios Pro. axios.link/4dGrnLi

• Chariot Claims, an NYC-based consumer protection claims platform, raised $10m in Series A funding. Silverton Partners led, joined by Indicator Ventures, Lightbank, Neon Fund, ZVC, Rosecliff Venture Partners, Alumni Ventures, FJ Labs, Graph Ventures, and Vermilion Ventures. axios.link/4zubFLx

• Harbor, a provider of software to assess agentic AI risk at financial institutions, raised $10m in seed funding from Base10 Partners, Abstract, and 8VC, per Axios Pro. axios.link/3TOvRsx

• Aatmunn, a Detroit-based industrial intelligence provider, raised $8m led by Memento Growth Partners. axios.link/4s4w7An

• Othello, an NYC-based AI model developer for live sales calls, raised an $8m seed round from a16z, Owl Capital, and Long Journey Ventures. axios.link/4s7Xfym

🌎 Molagri, a Canadian developer of biopesticides, raised US$5.8m in pre-seed and seed funding. Convective Capital led, joined by Superorganism, YC, and Julian Capital. axios.link/4s57BPr

🌎 Ambio, a Finnish plastics procurement startup, raised €5.1m in seed funding. B2venture led, joined by Montis and Lifeline Ventures. axios.link/4i1Pi9k

• Holo, a Lithuanian AI marketing platform, raised €5m in seed funding. Market One Capital led, joined by Silicon Gardens, FirstPick, Leonis Capital, NGL, and Tekton Ventures. axios.link/4sa7ceH

🌎 OlsAro, a Swedish developer of resilient wheat, raised €5m in seed funding. Industrifonden and Nordic Foodtech VC led, joined by Future Food Fund, PINC, AgFunder, and GU Ventures. axios.link/4jsis3T

• Marklo, an SF-based agentic marketing platform, raised a $5m seed round. Forerunner led, joined by Freestyle Capital. axios.link/3TYJTYE

🚀 KP Labs, a Polish satellite data processing startup, raised €4.4m from Momentum Capital Partners. axios.link/4B7urde

• CodeWall, a London-based cybersecurity testing platform, raised $4m in pre-seed funding. Osney Capital led, joined by InReach Ventures and Antler. axios.link/4ikWy1c

🚑 Silvia Bio, a U.K. biomanufacturing startup, raised £3m in seed funding. Northern Gritstone led, joined by Parkwalk Northern Universities Venture Fund, and the UK Innovation & Science Seed Fund. axios.link/3U1aOmt

• Miracly, an AI marketing platform with offices in Sweden and Singapore, raised €1.8m in pre-seed funding led by Beenext Ventures and Lotus. axios.link/4jhdAOT

⚡ Skeleton Technologies, an Estonian fast-energy storage startup, raised new funding from insider Siemens at a valuation north of $1b. axios.link/4yedPxP

• AKAM, a property management firm backed by Audax Private Equity, acquired NYC-based Matthew Adam Properties. axios.link/47URKJY

🌎 Ambienta acquired a majority stake in Energreen, an Italian maker of vegetation management machines, from 21 Invest. axios.link/4B4wyyJ

🌎 Archimed agreed to acquire Genetica, a Brazilian provider of bio-based industrial wastewater treatment, biogas generation and bio-based crop protection. axios.link/47iK6ck

⚡️ Blackford Capital acquired E.G. Middleton, a Norfolk, Va.-based electrical contractor. axios.link/4B7Mu32

🚑 Buenavista acquired a 71% stake in Tiryaq Medical, a Spanish orthopedic and regenerative medicine group. axios.link/4ynWPFx

• Capital Machine, a Rotunda Capital Partners portfolio company, acquired KC Robotics, a West Chester, Pa.-based robotic systems integrator. axios.link/4jQaNwg

• Chubby Group, a restaurant and hospitality company, raised $50m at a $500m post-money valuation led by Prysm Capital, per Axios Pro. It also plans to acquire 47 restaurants from GEN Restaurant Group (Nasdaq: GENK) for $100m. axios.link/4eazEXY

• FormativGroup, a Rockbridge Growth Equity portfolio company, acquired Saige Consulting, an NYC-based AI and technology consultancy. axios.link/4s2wfQC

• GTCR and Elliott Investment Management agreed to buy car insurance software provider CCC Intelligent Solutions (Nasdaq: CCC) for $6.1b. axios.link/3WaRpAe

💍 The Knot, a Permira portfolio company, agreed to buy Zola, a wedding planning and registry platform that raised around $195m from firms like Thrive Capital, Lightspeed, Comcast Ventures, NBCUniversal, Convivialité Ventures, The Chernin Group, Legendary Ventures, SoGal Ventures, GingerBread Capital, BAM Elevate, Founders Circle Capital, Canvas Ventures, and BBG Ventures. axios.link/4jY98EU

• Lewis & Ellis, backed by Novacap, acquired Boston-based consultancy Alan Gray from Premia. axios.link/4yT5ilg

• West Madison Foods, a Brynwood Partners portfolio company, acquired The Flavor of California, the holding company of Bob's Big Boy Salad Dressings & Dips, from investors like Salt Creek Capital. axios.link/4hZhI3z

• Vivify Specialty Ingredients, a Gryphon Investors portfolio company, acquired AuNutra Industries, a Chino, Calif.-based supplier of botanical extracts and nutritional ingredients to the nutraceutical and supplement industries. axios.link/4ilUI00

🚑 Iambic Therapeutics, a San Diego-based AI drug discovery company, raised $150m in its IPO. It priced at the midpoint of its range, for an $809m market cap, and will list on the Nasdaq (IAM). The Phase 1 biotech had raised over $350m from firms like Abingworth, Alexandria Venture Investments, Alumni Ventures, ARK, Ascenta, Catalio, Everbright Biofund, and Freeflow Ventures. Flashback

• EQT agreed to buy Stockbridge, a U.S. real estate investment manager with approximately $16.5b in fee-generating AUM. axios.link/4dGduN5

• Lufthansa agreed to invest €1.2b for a 44.9% stake in Portuguese airline TAP. axios.link/4zoSqD2

• Penske Automotive Group (NYSE: PAG) agreed to go private for $16.3b, via a joint entity owned by Penske Corp. and Mitsui & Co. axios.link/3TXJaGY

• Piper Sandler (NYSE: PIPR) ended talks to buy advisory firm Perella Weinberg Partners (Nasdaq: PWP), per Reuters. axios.link/4hNCW5L

• GenNx360 Capital Partners raised $285m for a single-asset CV focused on Whitsons Culinary Group. axios.link/4jhqHj3

🚑 OrbiMed raised $1.9b for its tenth flagship VC fund and over $1b for its sixth Asia-focused VC and PE fund. orbimed.com

• Pear VC, a Menlo Park, Calif.-based seed-stage investor, raised $333m for its fifth fund. axios.link/3TS9nH7

Andreessen Horowitz laid off the majority of a 34-person team that helps portfolio companies recruit talent, Axios reports.

• AE Industrial Partners promoted Chris Aguemon and Bill Strobel to principals. axios.link/4yfieAB

• Eric Coonrod joined National Business Capital as managing director of institutional partnerships. He previously sold his I-banking firm to Expa portfolio company Iconic Business Services. axios.link/4ilCdJa

• Mario Giannini is retiring as executive co-chair of Hamilton Lane at the end of March 2027. He stepped back as CEO in 2023, succeeded by co-CEOs Erik Hirsch and Juan Delgado-Moreira. axios.link/4hMFfpR

• Bucky Moore is stepping down as a partner with Lightspeed Venture Partners, which he joined early last year from Kleiner Perkins, to launch his own VC firm (smaller scale than Lightspeed). axios.link/3VOvJd9

• Stage 2 Capital promoted Erin Olsen to VP of marketing and Kevin Swain to principal. stage2.capital

• Go Suzuki joined I Squared Capital as a principal at the firm's new Tokyo office. He previously was with BlackRock's Global Infrastructure Partners. axios.link/4hX42WW

CoreWeave was at the heart of yesterday's tech sell-off, viewed by many as an indebted canary in the coal mine for the broader AI trade, Axios' Matt Phillips writes.