Many start-ups have begun their growth with “friends and family” money or investments from angel- or seed-stage investors. Angel investors – – particularly sophisticated angel groups – – can be an essential step in funding the growth and development of a new company. Later, as it grows, the company may seek further rounds of financing, particularly as valuation increase and dilution risks decrease. But how do we manage the relations between the earliest investors and those who come later? As second or third rounds of investment are contemplated, founders and company management, as well as investors, should be aware of many variables. These include the relative preferences and rights of the multiple series of stock, the voting and veto rights of one group or another, the right to appoint directors and observers, the pre-money valuation and the dilution of both the founders and the earliest investors. These can have important implications later if the company is a success (or even if there is a liquidation) and should be established earlier in the planning for second and third rounds of outside investments.