The reason for this, that makes sense to me, is that there's typically one lead investor negotiating terms and often many other following investors. If the lead

The reason for this, that makes sense to me, is that there's typically one lead investor negotiating terms and often many other following investors. If the lead investor was the only one who was paying, then only the lead would take the dilution. If this is spread out among all investors, it's conceptually more fair since the lead is negotiating for all of the investors effectively. At that point, if you have a 50k legal bill, you can either say it's a 1M$ round where each investor has to chip in their share, or you say it's a 1.05M$ round and the company has to pay.