Closing the fundraiser can sometimes be a challenge.

In down markets and uncertain economic conditions, investors hesitate to commit.

Consider incentives for investors to move the fundraising to a close.

Here are some key incentives:

Offer advisor shares to investors who invest above a minimum amount.

This gives the investor additional shares in return for their support.

Negotiate the value of the advisor shares based on the work the investor will provide.

Offer warrants to investors who invest within a certain time period.

Warrants give the holder the right to additional shares.

Finally, consider adding preferences to the terms sheet for investors who come into the round.

Preferences give the investor dividends, which in most cases will be accruing rather than paying out.

Put a deadline on the incentives to move the investors to action.

Consider a deadline in the 1-2 month range.

Consider these incentives to close investors to finish the 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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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.