In early December, two different portfolio companies pulled their respective second rounds together.

One is a pretty classic seed fundraise, led by an investor with expertise in their space.

The other is what I've taken to calling a headless round.

A "party round" always sounds a bit flippant and careless; a headless round isn't that. It's where a team intentionally pulls together several microfunds and angels for a round that's typically less than $5M. There's no "lead" as such.

By going headless, you clearly lose the brand power of having a well known fund lead a more formal round. I don't tend to believe in boards before Series A but, if that's your jam, you also need to be careful about governance if there's no clear lead.

But the benefits..

Even if one microfund has more influence or a larger commitment, the price typically is still set by the founder.

Many networks versus one network of the lead investor (although obviously most tiny funds are power law funds with larger portfolios so important to reference the reality of value-add versus how tiny funds sell themselves)

Critically, speed.

The headless round closed before everyone went out for Christmas. The other's still being worked on.

You could argue that in the first case, the founder correctly assessed the appetite from smaller funds and balanced it against the early December timeline and how slow larger funds can be to run processes.

But I'm seeing this year round. And sometimes I'm seeing smaller, less well known emerging managers put rounds together against well known multi-stage firms stretching down into seed - and be chosen.

Because increasingly these two types of firms are in the same industry but not the same business. A huge multi-stage firm has to own a certain % to calculate their fund returner and can select from a very slim pool because of this (and can spend 40 hours a week taking calls from dazzled founders); for much smaller funds, the % needed is less, the round sizes/valuations can be fluid and with smaller teams they can often move faster.

Choice is always a good thing. It makes investors of all types work harder, and gives founders options. But historically part of the leads job was to ensure the next round happens. In a headless round, it can be both everyone's job and nobody's job, and that's a core risk to be calculated