Ah, allocation.

That sweet sweet equity (or ownership stake) that we get when we invest in a startup.

Getting allocation into a company is often pretty straightforward — after all, most founders are hungry for capital and will gladly accept investment from any interested party.

But sometimes allocation is harder to get… like when the deal is smokin’ hot and investors are clamoring for a slice.

So let’s talk about how to get allocation into an oversubscribed startup without torching your relationship with the founder. Because nobody wants to be the investor who gets talked about in founder WhatsApp groups for all the wrong reasons.

We’ll cover:

• making the ask
• adding value
• a big fat warning

Making the Ask

I’ve seen it a thousand times: VCs and angels playing weird games when it comes to asking for allocation.

They get all coy, waiting for the founder to make the first move.

Stop staring at your shoes and just ask politely for allocation.

Try the "positive sh*t sandwich" approach:

"Hi Founder, I'm so excited about your company and wanted to ask if you'd be open to taking $100k of investment from me.

I was inspired by your mission after our last chat. You're just the kind of founder I want to bet on – your expertise plus the traction you've shown, and how personal this project is for you... it's impossible for you to lose. And that’s why I'm asking you to take this investment from me."

Flattery works. Being direct works. Sharing your genuine excitement works.

Adding Value

When investors are fighting for allocation, the founder has the luxury of being picky. To separate yourself from the crowd, show the founder some love.

I like the “here’s what working with me looks like” strategy, which is essentially just adding value immediately. For example:

• Hiring Help: "Hey, I saw you're hiring a senior engineer. I dug through my network and found five solid candidates. Do you want an intro to any of them?”
• Knowledge Sharing: "I'm pretty good at Facebook ads optimization. Mind if I spend an hour reviewing your campaigns? I might be able to boost your LTV/CAC ratios."

Warning: Don’t Be Awful

When I first joined the VC world, I thought people were exaggerating when they told tales of horrible investors.

But those wild stories are true. There are actually investors out there who make threats to founders… and nuke the relationship in the process.

Don't be this person.

Don’t be a bully

Let’s say you're an existing investor who wants to exercise your pro rata rights in the next round.

You might have legal rights, but saying "You have no choice but to take my money" is a great example of being awful.

Here are other awful things that investors sometimes say:

• "You need to take our money or you'll regret it"
• "If you don't take our money, we'll make sure no one else funds you"
• "We’re the only investors who understand your business – without us, you're doomed"

Yikes. Just… yikes.

If you're a founder reading this and someone threatens you: run. Talk to your trusted investors and other founders about how to handle these folks.

Life's too short to spend 7-10 years building a company with a bully.

Just be nice, you guys.

Your investor-founder relationship is like a professional marriage.

You're potentially (hopefully) going to spend the next decade together working through extreme lows, celebrating wins, and making big decisions together.

In my actual marriage, I don't burn bridges. I'm honest, direct, and I add value to make our relationship stronger. The same social contract applies here.

Be a good partner, and good things will come.