What are investment tranches?

On the project homepages it states how much is required to finish an investment tranche. This often creates questions: Is a round the same as a tranche?; When the tranche is finished, is it no longer possible to invest in the project?, etc.

When a round is opened, it is done so with a maximum amount of capital to be raised that is usually set by the project's management company and agreed with the fundraising company. In a round to raise capital, tranches are set to be able to check how much capital will come in and to be able to adjust the capital raising to the project's needs. Capital is only raised when a project needs it to move forward, hence the tranches may be intermittent and their duration may vary over time, to end a round or not, etc.

For example, in the case of a large investment, it may be necessary to close the round because the maximum amount to be raised has been reached. In deference to whoever is in the process of making their investment, the tranches are set: while a tranche is open the round cannot be finished, but if, when the tranche is finished, no more capital is needed, the closure of the round would be final. Whether new rounds are opened later and the conditions thereof would depend on the project's management company.

Therefore, when a tranche is finished, the management company of a project revises what capital has come in and what capital is needed; the end of a tranche does not necessarily mean that a round of capital raising will be finished or that no more capital will be raised for that project again. This would depend on the project's financing needs.

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