Helpful to the startup, not to the investor. My reply was to patrickk above who listed Milner's investment as a draw for other investors. From the investor's perspective a hungry startup is preferable. Thus startups that aren't hungry by virtue of someone else's investments are less desirable.
The fact that a startup isn't desperate makes it more desirable -> it may get to choose investors -> it ends up with top tier investors -> it is more likely to succeed (good investors are more than a check book) -> hence it's a good investment -> better for any given investor in the round (as well as the startup - it can and should be a win-win)
