How To Find a Lead Investor

 

Most investors do not lead the fundraise round but rather follow-on.

There’s a great deal of work and most investors are not signing up for it.

Some will express interest in investing after you have a lead investor.

Here are some steps to help find a lead investor for your fundraise:

Start with a convertible note for your fundraise.

Convertible notes bring investors into the deal without setting the valuation.

The founder can start picking up funding which helps fuel the growth of the business.

This validates the fundraise to the follow on investors. Look at other startup fundraisers to see who led the round.  

Make contact with startups who raised from that lead investor and ask for a warm introduction.

Reach out to those who are known to lead investment rounds and show the fundraising traction already in place.

You may be able to attract a lead investor to lead your round. 

Another approach is to take two to three investors who are interested and gather them together into a group with a regularly scheduled meeting.

In the meeting they each share their questions and feedback.

Document the results of the meeting and share with the follow-on investors.

By gathering the three investors together you can create a lead investor group.

Once the lead investor group comes to agreement with the founder on valuation and the deal terms, you have a led deal.

Consider these steps in finding your lead investor.   

 

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.