What Is the Value of a Lead Investor

 

The lead investor can be an important resource to a startup.

Here’s a list of values lead investors can bring to their fundraise:

They help increase the chance of success of the fundraise.

The presence of their leadership shows investors the startup has support.

They bring other investors into the fundraise.

Finding additional investors is the ongoing challenge.

Many investors will not invest without a lead investor.

The presence of a lead investor solves that problem.

The lead investor can help progress the fundraise process.

The lead investor typically invests 20% to 50% of the round which takes care of a sizable portion. 

The lead investor leads the diligence which is oftentimes the biggest hurdle in closing the round.

The lead investor manages the legal process in papering the deal.

The lead investor oftentimes forms an advisory board if there’s no formal board.

Finally, the lead investor negotiates the deal with the startup which is a time saver.  

 

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.