"he best way to illustrate the complexity of this concept is to take a look at a couple of examples. Take the case of a Series A round for ProRata Corp. Assume the post money on the deal is $8m and each investor, having invested $2m each, ends up owning 25% of the business. Fast forward to the Series B financing and consider two scenarios. In the first scenario there is no outside investor and the company raises $6m. Logically, each investor would contribute $3m to the financing, as each was responsible for 50% of the prior financing round. Note that this would leave them each owning just under 36% of the business post financing -- meaning that by some definitions they actually played above their pro-rata amount because they have each increased their ownership in the business. Now consider the same case where a new investor is brought into the mix in the Series B. Assuming this investor takes $2m of the $6m round, is the pro-rata for the remaining investors $2m (half of the remaining $4m)? It could also be $1.5m (which, in the $6m round would allow the investor to retain their 25% ownership). "