"The harder decision, which is often the right decision, is not to fund. Each time a VC makes a follow-on investment, it is a new and independent IRR decision. The money that went in previously is a sunk cost. In the above example, the product you invested in did not work, the money to create and market that product was wasted, the people that you relied on to make the product a success have failed or left, and the company did not live up to its expectations. You have to look at an old deal’s “new idea” as if it were a new company looking for funding in your office. That is the economic decision you are making for your limited partners. Trust me; you are looking for reasons to say yes to fund your existing deals. It is really hard to say no to them. But you have to be objective."

Five Years Too Late/RRE Ventures.

This strikes me as very important relative to what I think we might see in the tech venture financing world in the next few months (years?).  Thus it’s important to consider all perspectives - those of the company (more well known), and those of the investor (less well known but the above giving more transparency to this process).