Ask HN: Should I give my early angels extra equity?

I've seen @joshu occasionally answer questions like this on twitter, so it may be worth pinging him for an uninterested angel's perspective.

From my pov, it sounds to me like the early angel is basically whining. Personally, I'd offer to let him or her buy up and preserve a pro-rata. My decision would depend on if this is an experienced angel with a good rep, or someone who isn't particularly experienced / not used to how investments go and the idea that you can lose. ie if you didn't raise that $150k, this angel's investment would be worth $0 so that's it's own reward.

Nothing. Tell them they can put in the extra 150K themselves if they want to keep the others out. They should have 1st rights if they did it correctly.

Based on what? The 1st investor should know better. They should say, "we believe in you, and we want to offer the additional funding." This is not a game. If OP has something that investors are interested in then they should be able to raise cash for the good of all shareholders. The OP should go to the original investor and offer them the first right of refusal. This is a business. The angel should say, "cool here is the 150K" if they believe in the company. This is either a new angel that has have never done this before or an angle that is trying to take advantage of a new founder. The right thing for the OP to do is to tell the investors they need addtional funding and ask if they want to particpate.

For what it is worth I have invested in angel rounds, arranged for a startup to receive angel rounds, done a few startups and have held board seats. Also to the OP - warrants with a note is something to look at.

Let me clarify, I am not suggesting that you simply give someone stock because they grumbled or feels slighted because 2nd round angels received more value for their investment. Maybe the 2nd round investors were simply better negotiators. There are a number of reasons that giving more stock was necessary. I am suggesting that maybe the first angels have abilities etc that could have helped to hold costs down etc. requiring the necessity to raise a smaller amount which would ultimately minimize their stock further diluting. This in effect results in greater stock value than if you would just take the total amount of money from additional angels.

Angels I have worked with have always been great and would not expect a "gift" of additional stock. That being said, if an angel had skills, products, or services that I otherwise would have paid more for, I worked with them to supply what was needed for far less $ and future stock options.

Experienced Angels realize that raising more money is often necessary and if additional money is not raised their risk on their investment increases exponentially. Further, most would have first right to increase their investment so they can invest and prevent their dilution as well.

Communication is the key and I was fortunate to work with good angels. I had their back and they had mine, hence we were in it together. They never expected to be given anything but because we communicated their skills and networks became readily accessible.