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For a pre-seed fund of about thirty-five companies, what Maximum Portfolio Investment Percentage is appropriate?

The Cornerstone LPA offers five, ten or twenty-five percent as the cap on how much of total commitments can go into any single company. For a ten million dollar pre-seed fund making around thirty-five investments with reserves for follow-ons, which is the sensible setting, and what goes wrong at each extreme? 
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- For a **$10 million pre-seed fund** targeting **~35 companies**, **10%** is usually the sensible cap.
- Why:
- **5%** is often too tight if you reserve for winners. It can block a reasonable initial check plus 1 to 2 follow-ons in your best company.
- **10%** preserves diversification while still letting you support outliers.
- **25%** is usually too concentrated for pre-seed; one company can absorb too much fund exposure and break the portfolio math.

- Practical lens:
- Maximum Portfolio Investment Percentage generally includes **initial + follow-on** capital into one company.
- With 35 companies, your strategy depends on breadth. A **25%** cap risks turning a diversified pre-seed fund into a concentrated bet.

References:
- https://decilehub.com/base/1-general_questions/19718-define-the-following-lpa-term-maximum-portfolio-investment
- https://decilehub.com/base/1-general_questions/163739-does-the-maximum-portfolio-investment-percentage-includes-the-quota-for-follow-on-investment
- https://decilegroup.com/articles/vc-check-size

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