Once you have initially created an investment for a company, if you decide to make further investments, you need a place to add this to your portfolio. This is where the 'follow on' comes into use. Not only can you add further investments here, it is also the place to process any convertible instruments into equity.
Once you are on the company page, you will find the Record an update button in the top-right corner of the screen. Clicking on this button will reveal a dropdown menu with several options. From here, simply select 'Record a follow on' to proceed.
Selecting an Instrument
Upon selecting 'Record a follow-on', you will be presented with a list of investment instruments to choose from.
Simply select the instrument that corresponds to the follow-on investment you wish to record, and you will be taken to the relevant input fields to complete the process. If you wish to add more than one investment type, you will have the opportunity to add these later.
If you are making further investments within a company, whether in the same funding round or another, this investment can be entered here. The fields and information to be entered here are the same as what needed to be entered when you initially added a company. Further information regarding adding companies can be found here.
Conversion to Equity
If you own any instruments that can be converted to equity, a convertible note, for example, an option to make a conversion will be available in the company profile, Record an update dropdown. To make a conversion, simply select 'Record a conversion'.
Once you have chosen the conversion to be processed, the investment option will be available to convert and further fields will become available for you to input the information relating to the conversion.
Depending on which instrument you have chosen, there may be different fields that are precise to different instruments.
You also have the option to update/edit the existing cap table for the specific company. More information on cap tables is available here.