A lead investor is important for raising funding.

They negotiate the terms and valuation of the deal and bring other investors to join the round.

Here are some key steps in closing a lead investor for your fundraise.

Identify the right investor for your startup. Look for one that fits your sector and stage.

Generate interest from other investors to show the lead investor there is support for your deal.

Introduce the proposed lead investor to these investors. Gather all the diligence documents into one place so the process doesn’t turn into a paper chase.

Provide background information about comps in the market to show the range of valuations in the sector.

Design an initial set of terms and a proposed valuation to provide a starting point.

Offer additional incentives to the lead investor such as warrants for leading the round.

Offer a paid advisory board position to the lead investor upon completion of the round to compensate for the work.

In short, reduce the workload and provide incentives to the lead investor.

Consider these steps in closing a lead investor for your round.   

 

Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding.

Let’s go startup something today.

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Thank you for joining your host Hall T. Martin with the Startup Funding Espresso — your daily shot of startup funding and investing.

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Disclaimer:
Hall T Martin is the director of Investor Connect, which is a 501(c)(3) nonprofit dedicated to the education of investors for early-stage funding. All opinions expressed by Hall and podcast guests are solely their own opinions and do not reflect the opinion of Investor Connect. This podcast is for informational purposes only and should not be relied upon for the basis of investment decisions.