It’s a little old school, but it’s not that uncommon.
If you had just one investor, then in a perfect world, this investor would get to dole out chunks of the initial investment and see how it goes.
The problem is tragedy of the commons. It doesn’t work with a syndicate.
So as angel and seeds rounds have become bigger, and less collaborative syndicates, “tranching” deals at least formally has faded away and is less common today.
And in some ways, doing multiple rounds of SAFEs does this informally.
But it still lives on formally where you just have 1–2 early stage investors carrying the whole company.
As a VC, you want a chance to play a few cards sequentially if you can. And then. Go all in when the time is right.