This makes perfect sense and is a good policy. As a policy, they won't invest in future rounds. So everyone else knows they won't, and no one asks "why isn't K

This makes perfect sense and is a good policy. As a policy, they won't invest in future rounds. So everyone else knows they won't, and no one asks "why isn't Kima investing in this round?". It can be bad when an investor who's already in a company doesn't participate in future rounds, as it signals that someone which more data isn't interested in putting more money in. They're avoiding this entirely, which is good for the startup. It's a really bad signal when you get seed funding from someone who does do follow-ons, but they don't want to follow-on with you. It can make it very hard to fundraise.