The “lead investor” dance

David Cohen

The term “lead investor” is often code. ” Let me know when you have a lead investor. ” You see, many angel and seed investors view it as their job to establish a “free option” on investing in your company. By telling you that they’re potentially “in” if you have a lead investor, they establish the free option to decide later.

Never ask anyone to be your lead investor

David Cohen

Let me explain why you should never ask anyone to be your lead investor. If they want to invest, they’re going to want to lead and will throw out a term sheet. You never have to ask them to be your “lead investor.” Smaller investors all go in the other bucket, whether they are microfunds or angels. By definition, they’re not as credible of a lead investor generally speaking, since they’re less than half of the rounds capital.


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How To Secure A Lead Investor


By searching for a lead investor in your next funding round. The lead investor is the first step in Read more >. The post How To Secure A Lead Investor appeared first on The Gust Blog. By Paula Taas, Founder Institute. You’ve created an amazing founding team, you’ve built a brilliant product that has been gaining a lot of traction, and now you’re looking to expand your company. How do you continue to build your business?

The “Come-from-Behind” Lead Investor

Genuine VC

Is it worth paying attention to this potential “come-from-behind” VC investor? The risk with engaging with an investor who isn’t as up to speed is a waste of the most valuable limited resource – time – when a CEO is concentrating on figuring out the best fit among the remaining candidates AND while simultaneously running a company, after all. The best litmus test to suss out whether or not a potential come-from-behind investor is worth paying attention to is if they’re “doing work.”

Do you need a lead investor in your seed round?


One question that seed investors love to ask is if you have a lead investor in your seed round. But once you figure out why an investor is asking, tactically speaking, what do you do? Let’s say that you find out that an investor is asking because he/she does not invest without a lead investor in place. Let’s say the investor simply relies on other people to do due diligence and does not believe in party rounds. Do you try to find a lead?

What percentage of a Series A round is typically invested by the lead investor?


In unusual (but not unique) cases, a well-respected or high-profile individual angel may be able to successfully lead the first professional funding round of an early-stage startup with a very small investment, accounting for only a small percentage of the round. Invested Interests Angels funding investor series a

Entrepreneurs Should Stop Lying To Investors – And Themselves

YFS Magazine

Lead investors leadership personal developmentI use to think that transparency was overrated — not because I didn’t want to be open, but because I didn’t believe much value could come from it.

Building the Best Seed VC Syndicate in 2020: Navigating “Leaders” & “Fillers”

View from Seed

The former is most common post-accelerators (typically YC), but is much more rare in attracting intuitional seed investors in other contexts (though it can be productive in pre-seed for angels). Once a lead firm has been established, then it becomes a process of assembling puzzle pieces.

Startup CXO: A Field Guide to Scaling Up Your Company’s Critical Functions and Teams

Feld Thoughts

Fred Wilson was his lead investor. I was the lead investor for Veripost. ” So for the deal, investors on both sides converted to common, we split the combined company 55/45, Matt became CEO, and Greg led a new Series A financing into the combined company.

Edgecase Gets $7.5 Million in Venture Capital


The Austin-based startup received the funds from lead investor Austin Ventures and other investors. Edgecase, which provides data and analytics for e-commerce sites, announced this week it has received $7.5 million in venture capital. The company plans to use the money for research and development and sales and marketing. To date, the company, founded in […] The post Edgecase Gets $7.5 Million in Venture Capital appeared first on SiliconHills. Austin

Choosing a VC Is Like a Marriage. But Pitching VC’s is NOT Like Dating

View from Seed

It’s a super important, near permanent relationship, especially for a lead investor that is likely to take a board seat for many years. First, unlike in dating, a VC is already an investor in multiple companies when they are considering an investment in a new startup.

Announcing NextView IV

View from Seed

But it is also large enough to write a $2M check to lead a post-seed round for companies that are starting to scale. Each time that we set out to raise a new fund, we deeply believe that we are going to be able to deliver superior returns to our investors.

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Building the Best Seed Syndicates

View from Seed

Here are a couple tips and suggestions on how to go about creating the most supportive investor base for a typical institutional seed round. These folks don’t typically lead rounds, but would certainly invest if the right round came together. So make it easy for them to say “I’m “in” assuming you get a good lead and close at least $X to get you Y months or runway.”. So really take your time to do your due diligence on the investor (both the individual and the firm).

Eventador Lands $3.8 Million in Funding


The Austin-based startup announced that the investment came from lead investor LiveOak Venture Partners with participation by Deep Space Ventures, RSH Ventures, Capital Factory and existing investor Keshif Ventures. Eventador announced recently the company has closed on $3.8 million in seed stage funding.

Updating Your Seed Investors – Board Deck & Update Email Templates

View from Seed

Today I’m excited to announce the relaunch of our most popular resource ever: board meeting deck templates for seed-stage startups, now in conjunction with an investor update email template. Download Investor Update Email Template. Investor Update Email Template and How & When to Use It. First and foremost, investors (whether they say it or not) prefer over communication of what’s happening at the company, both the good and the bad.

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Timing Is Everything: How To Secure Early-Stage Funding


Most startups will need a viable product and proof of credibility before they can expect early-stage investors to really bite. The most common fundraising mistake I see is when early stage entrepreneurs focus all their attention on trying to secure a $1 million check from a lead investor.

Sharp Elbows Among Seed VCs

View from Seed

This post will try to describe why this is happening and what repercussions are for founders and investors. Today, most series A’s are led primarily by one fund that makes up the majority of the round, and there is fierce competition for that lead slot. More and more, I hear seed investors claim that they are increasingly religious about hitting their ownership target in the majority of rounds they are a part of. Repercussions for Investors.

What Valuation Should I Expect in My Seed Round?

This is going to be BIG.

That being said, you want to feel like you got a good deal--and your lead investor should be able to walk you through how they got to a particular valuation and why they thought it was appropriate. Powered by OpenReel I have to be honest, I'm a little suspect when one of the first questions a founder asks me is about valuation.

The End of Syndication

View from Seed

For early stage VC ‘s, Syndication is the process of sharing investments with other potential co-investors. The classic scenario is when a VC has a signed term sheet to lead a round, but has left room open for another meaningful investor.

What’s actually required to start or close a funding round?


Technically, a “funding round” simply means a company accepting one or more investments from one or more investors on similar terms within a certain period of time. 25 individual angel investors funding a startup on a convertible note. In all cases, the one fundamental requirement is that the company and the investor agree on how much is being invested, and on what terms. A network of other investors to whom they can introduce the company.

The NextView Ventures Manifesto

View from Seed

Most of these rhyme with what we’ve said in the past, but some have also evolved to fit the changing landscape and our own convictions about what really matters for founders and their investors at the seed stage. As the venture capital industry has evolved, more and more seed investors are passing on traditionally “seed stage” startups because there isn’t enough traction. We are first and foremost pre-traction investors. Lead investors are few.

ATX Seed Ventures Invests in GoCo’s $2.5 Million Round


ATX Seed Ventures announced it is the lead investor in GoCo’s $2.5 Other investors included Guardian Life Insurance and Salesforce Ventures. million financing round., based in Houston, is a software startup that provides an all-in-one Human Resources platform focusing on small to medium sized companies. Its founders, Nir Leibovich, Jason Wang and Michael Gugel […] The post ATX Seed Ventures Invests in GoCo’s $2.5

Failure to Execute vs Failure to Raise

Hunter Walker

Because as an early stage lead investor one of our responsibilities is to help a company think through its strategy and provide feedback on the pace and quality of execution. Yes there’s a funding process and helping founders navigate that successfully is a key part of a venture investor’s value, but a CEO shouldn’t rely on “failing to execute but successfully raising” (even though this happens too). 14 for 14.

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TabbedOut Raises Additional $2 Million in Venture Capital


The other investors include lead investor Wellington Management Company and participating investors NEA and Morgan Creek Capital […] The post TabbedOut Raises Additional $2 Million in Venture Capital appeared first on SiliconHills. TabbedOut, a mobile payments app for bars and restaurants, announced Friday it has raised $2 million more in its Series C venture round. Miami-based Aeterna Capital provided the funds.

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The Shift from FOMO to FOLD in Early Stage Investing

View from Seed

The way investors process investments, what they look for, and how they behave will likely shift in some pretty interesting ways in the coming years. In a FOMO world, seed and series A investors are more likely to extend beyond the bounds of their stated strategy to get access to companies.

Four Tricky VC Questions and How To Handle Them

View from Seed

For each, I’ll share some commentary on what investors are trying to uncover and talk how to handle them. This question is asked to try to figure out how much to prioritize the opportunity relative to the rest of an investor’s pipeline.

What Happens When A Founder Wants To Stop Versus Pivot?

Hunter Walker

If you don’t have a mission or problem you’re passionate about, where investors are aligned on the business, and it’s still early stage, you’re better off returning the cents on the dollar. At the same time, investors should give the founders some space to figure out if they want to push on or not. But I’d suggest at the end of that they “re-pitch” their lead investor(s).

Sometimes a Good Loss is Better than a Bad Win


Or you negotiate the highest possible valuation from a new lead investor, only to discover that new lead investor, now on your Board, expects you to triple it in four years and is way out of alignment with the rest of your cap table. Or same goes for getting a “pass” from a desirable investor in a financing round but at least understanding why and getting a key to fixing something problematic about your business model or management team.

The Future Fifty: A dissection of the United Kingdom’s tech scene

The Next Web

Whilst exact details remain unclear, Tech City declared that companies on the program have access to a team of leading investors, accounting firms and business leaders for ongoing advice and support. . Jay Patani is an analyst at EC1 Capital, a London-based early stage, Web technology focused venture capital company. Email him at jay(at) The UK government has been keen to champion the UK as a hub for technology and innovation.

3 Founder Attributes We Look For When Investing

View from Seed

We were co-lead investors in Grove’s seed round and actually doubled down in an intermediate round prior to this challenging series A process. As seed stage investors, we think very deeply about the attributes of founders that we want to back. I’m really grateful for Stu for sharing this story, and for leading Grove through that rocky period with his resilience, customer obsession and courage.

Dear elizy: an investor wants to invest when we have a lead.  what does that mean?


An investor I met with got really excited about joining my round. He said he would like to join once we have a lead. Do I need a lead? What is a lead? 1) Technically speaking, you do not need a lead. Investors will simply look at the terms and decide whether they want in or not. 2) Practically speaking, many investors are sheep (followers) and will want you to have a lead investor to validate your business.

Sometimes a Good Loss is Better than a Bad Win


Or you negotiate the highest possible valuation from a new lead investor, only to discover that new lead investor, now on your Board, expects you to triple it in four years and is way out of alignment with the rest of your cap table. Or same goes for getting a “pass” from a desirable investor in a financing round but at least understanding why and getting a key to fixing something problematic about your business model or management team.

Pitch Deck Month: The “Ask” Slide

View from Seed

It shows some flexibility and allows for different investors (depending on their own fund size and strategy) to see a larger or smaller number depending on how they’d potentially fit into the round most easily. Also, sharing some flavor (but not necessarily full detailed specifics) of the existing investor-set adds context. For a potential investor, it answers the questions of how much and why investing now is the right time.

Which Markets Are the Most And Least Served by Seed Investors?

View from Seed

About a year ago, my partner David Beisel talked about how seed fundraising is no longer a local game , and that the best entrepreneurs seek out the best investors for them outside of their home market. Not surprisingly, SF leads the other three markets by a wide margin.

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Filling Out the Round


For example, “VC will serve as the lead investor up to $400,000; Company would source balance of the round up to $600,000 (so round size would be up to $1,000,000 in the aggregate).”. At the early stage, the founding team often has lots of “interest” lined up waiting for a lead. And it also puts the founding team to the task – VC stepped up to lead so now go and fill out the round!

Spredfast Lands $12M Series B

Austin Startup

Spredfast, a leading social media management system provider, today announced it has raised $12 million in Series B funding led by InterWest Partners. Also participating in the round is Austin Ventures, the lead investor of the company’s $3.6 million Series A round.

A Look at What’s Fueling Startup Investments in Colombia


Here’s a look at three factors fueling investor interest in Colombia’s technology startups. However, the 2016 Peace Deal with the FARC , among other efforts, changed its international reputation, leading to a 300% increase in foreign visitors since 2006.

The Importance of Boards


The importance of the Board is why institutional investors (like VCs) often get a seat on the Board after an investment. But don’t be fooled, there is an element of control as investors want a say in critical decisions. I have now done 2 deals where there has been a lead investor (not CVF) who did not mind the “founder as sole board member” trap. We followed in line with the lead investor and went along with the structure.

My new Startup Board Mantra: 1-1-1


Then 1 independent for every 1 investor. The conversation with an existing VC about leaving the board to make room for new investors or an independent. The conversation with a new potential investor about not taking a board seat. If you have a big new lead investor writing a $40mm check into a growth round, you may not have a leg to stand on. Otherwise, your talking points are the same as talking to an existing investor above.

CopperEgg Announces $2.1Million in Funding, New CEO

Austin Startup

Silverton Partners was the lead investor and is joined by a group of new venture and corporate investors including Webb Investment Network, the investment fund of former eBay COO Maynard Webb, and several private investors including Asana executive Kenny Van Zant; bringing total financing to $4.1M. CopperEgg, a cloud monitoring and analytics company, today announced the addition of tech industry veteran Bob Quillin as CEO, as well as an additional $2.1M

Which Fundraising Round Should You Skip?

View from Seed

The reality is that if a founder raised every one of these rounds, and lead investors always got their “target” ownership, the level of dilution would be ridiculous. No good investor would want the founder/CEO of a company to have insufficient ownership by the series A, and every founder I know is sensitive to taking too much dilution. They find weak pre-seed investors or angels who are almost predatory in their early stage pricing and add no value.

The Market Size Fallacy for Seed-Stage Startups

View from Seed

This investor loved the team and thought the solution they were building was compelling. I remember talking to one of their angel investors (and also one of my old mentors) about what the company could become and what it would look like if it ever became a really big business. I wondered if it could potentially be a “platform” for something else (the most meaningless and overused phrase that entrepreneurs and investors try to use to make companies seem more important than they are).

Failure and Redemption

Steve Blank

In my mind, I had done everything the investors asked me to do. When my co-founders and I got the company scalable and repeatable, we hired an operating executive as the CEO and returned a billion dollars to each of our two lead investors. “What’s gone and what’s past help. Should be past grief.” ” William Shakespeare - The Winter’s Tale.