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Michael Romano, Lightspeed Venture Partners’ former chief business officer, has joined Megalith as a founding partner, according to The Information. Megalith provides capital that seed funds can use to invest in later startup rounds, allowing them to pursue pro rata allocations while retaining most of the carry on that investment.
What Romano’s move means
Romano spent more than 13 years at Lightspeed, focusing largely on fundraising. The Information reported that he raised more than $35 billion during his tenure and joined Megalith as a founding partner. In a note to Lightspeed limited partners, Romano wrote: “I found billions in unused investment rights held by seed funds in the rounds the world’s most premier venture capital firms are leading.”
Megalith was founded in 2021 by John Komkov, Elizabeth Lowell, and Preston Moore. Komkov described the firm’s first, $110 million fund as a “proof of concept,” according to the report.
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1Fix the driver behind crashes, sound loss and screen glitches2Repair Windows errors before they cause bigger problems3Scan for outdated or missing drivers - takes under a minuteHow Megalith’s pro rata financing works
Pro rata rights let an investor buy a share of a company’s future financing rounds, helping preserve its ownership percentage as the company raises more money. A seed fund may have the right to invest again but not enough available capital to take its allocation when a successful portfolio company raises a larger round.
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- A seed fund identifies a follow-on opportunity. It offers Megalith the chance to fund its pro rata allocation or another follow-on investment.
- The startup must agree. The arrangement is conditional on the company approving it; the seed fund cannot assume it can transfer or share its rights without that approval.
- Megalith supplies capital and buys new shares. The report says Megalith invests in the later round, rather than simply purchasing the seed fund’s existing shares.
- The seed fund retains most of the carry. Megalith charges management fees and, under the economics described in the report, receives a share of marginal profits after a specified return threshold.
The structure is intended to let a seed investor remain financially involved in a promising company without raising the full follow-on capital itself. It depends on the company’s consent and the terms agreed for the specific investment.
Reported fund size, check sizes, and economics
The figures and terms below are those reported by The Information; they have not been independently confirmed here and should not be treated as a public offer or guaranteed terms for every investment.
| Item | Reported detail |
|---|---|
| Megalith’s second fund | $280 million raised |
| Assets under management | More than $500 million |
| Typical check | $5 million to $10 million; potentially as much as $25 million including limited-partner co-investments |
| Blended management fee | 1.25%, compared with 2.5% that Megalith’s partners said larger firms typically charge |
| Carry allocation | The seed fund receives 20% carry; after realized profits double, Megalith receives 7.5% of marginal profits |
| Blended carry comparison | About 23% under the described arrangement, compared with 30% at many large early-stage funds, as characterized by the report |
The report also said Megalith had about $1 billion in potential deals during 2026 and had worked with about 40 seed funds. “Potential deals” is not the same as completed investments, and the reported figures do not establish how much capital was ultimately deployed.
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How Megalith differs from other follow-on approaches
The Information described GPx and Alpha Partners as other participants in follow-on investing, but their approaches are not identical to Megalith’s.
| Firm | Reported approach | Distinction |
|---|---|---|
| Megalith | Works with seed funds to finance their later-round allocations or other follow-on investments. | Focuses on a seed fund’s follow-on opportunity in a portfolio company; targets rounds led by about 20 firms the report describes as having strong track records. |
| GPx | Backs emerging managers’ funds and selected portfolio investments. | Invests alongside an emerging manager so that manager can lead; those managers may invest at any stage, from early to late. |
| Alpha Partners | Co-invests alongside early-stage funds. | The report describes its role as helping those funds exercise pro rata rights. |
These descriptions reflect the distinctions in the report, not a comprehensive comparison of each firm’s current funds or terms.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.What seed funds and founders should check
- Company approval: Confirm that the startup permits the proposed investor or financing arrangement.
- Legal rights: Review the fund documents and financing agreements to determine whether rights can be assigned, shared, or exercised through another investor.
- Economics: Clarify fees, carry, profit thresholds, and how realized profits are calculated for the specific deal.
- Allocation and governance: Establish who receives shares, what information rights apply, and whether the arrangement affects the company’s investor relationships.
The Information’s account does not establish that all seed funds can transfer pro rata rights, or that the reported economics apply to every Megalith transaction. Fund governing documents and company consent determine what is possible in an individual case.
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