How To Secure A Lead Investor

Gust

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.

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.

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?

Hippoland

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? Do you try to find a lead? or “We want to co-lead if you find another co-lead!”

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

Gust

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.

Eventador Lands $3.8 Million in Funding

SiliconHills

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

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

Gust

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.

Edgecase Gets $7.5 Million in Venture Capital

SiliconHills

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

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

SiliconHills

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. GoCo.io, 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

When Greed Turns To Fear

Feld Thoughts

If you are a founder running a high growth, VC backed company, here are a few questions to ask your investors today. If we can’t find a new lead investor, will you write us a check? There is a cliche in the financial world that has been around forever.

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TabbedOut Raises Additional $2 Million in Venture Capital

SiliconHills

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.

Rolling Closes Versus Synchronous Closes

Haystack

His tweet reads: New weak investor move. If you have conviction : invest and help the founder finish their round with good intros to other investors. Yes, sure, some of them are “rolling” closes where the investor who commits signs a document (usually a SAFE note) and then wires around that time. Most of these rounds have the investor wire on a specific day. I am not here to judge what the investor cited in the tweet did or didn’t do well.

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. .

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.

Sometimes a Good Loss is Better than a Bad Win

OnlyOnce

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.

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.

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

Hippoland

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. Dear elizy : I’m raising my seed round right now.

Reading the Tea Leaves: Where Am I in My Seed Fundraise, Really?

View from Seed

We’ve written before on how to research partners , how to pitch the right investor at a given firm, and how to raise seed capital , generally speaking. But it’s also useful to try and understand where exactly you are in the process with a particular investor.

The Buzz on Angel and Seed Investing Continues

Feld Thoughts

But I think the two best posts to come out of yesterday are Lead Investors, Dipshit Companies, and Funding Every Entrepreneur by Fred Wilson and MoneyBall for Startups by Dave McClure. Ah – well – another day passed and there was once again a ton of chatter around angel investing. A lot of it was prompted by AngelConf 2010 which you can watch recordings of on Justin.tv ( AngelConf 2010 Part 1 and AngelConf 2010 Part 2 ).

Board Seat For Sale

Feld Thoughts

Whenever a new investor showed up, they wanted – and got – a board seat.” Instead, there is no formal board, or no formalism around the board, so it’s just a free for all between the collection of early investors (angels and pre-seed/seed VCs) and the founders. Post seed boards tend to be founder and investor-centric. I get that many investors want board seats as part of their investment. I had lunch recently with a founder.

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Angel Bootcamp, The Blog Post: A Primer on Angel Investing

View from Seed

And although this is written for angel investors, I think entrepreneurs can only benefit by increasing their knowledge around these investors and hope you’ll continue reading if that’s you. Favor investment rounds with strong leads that haven’t raised millions of dollars before you.

The Importance of Boards

ithacaVC

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.

When Should Startup Founders Discuss Valuation with Seed VCs?

View from Seed

Sharing these pricing expectations early with potential lead investors fundamentally qualifies your conversations, but it also runs the risk of prematurely losing a potential financing partner, or else it can reduce options to maximize your fundraise outcome.

Keiretsu Forum Invests $3 Million in Savara Pharmaceuticals

SiliconHills

The Keiretsu Forum’s members gave $3 million as the lead investor on a Series B round for Savara Pharmaceuticals. “The opportunity to invest in Savara Pharmaceuticals attracted many of our accredited investors, who are deeply committed to supporting products and technologies with the [.]. Savara is developing pulmonary drugs to treat serious and life threatening conditions.

How I Think About Seed Investing As A VC

Feld Thoughts

Last week saw an explosion of discussion around seed investing, including plenty of negative comments around VCs as seed investors. While I agree that many VCs are crummy seed investors, I think there are some that are excellent seed investors. This prompted me to write a post titled AngelList Boulder and Some Thoughts on Seed Investing where I promised to write up some of my thoughts on how and why VCs could be good seed investors.

Filling Out the Round

ithacaVC

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!

Series A Startup CEO Salary

The Startup Lawyer

Earlier this year, this issue presented itself when a client was the lead investor in a Series A round of about $2MM at a $4MM pre-money. Furthermore, a demand for a high startup salary can signal that you don’t believe all those things in your investor pitch. A startup’s Series A financing shouldn’t be a large liquidity event or salary payday for the startup’s founders.

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 Are Pre-Seed Rounds and Why Do They Exist?

View from Seed

After all, aren’t seed investors (like us) by definition supposed to be the first and earliest-stage investors? Series A investors invested quite early, often before product/market fit. The proliferation of seed-stage investors.

And When My Time Is Up, Have I Done Enough: Fred Wilson’s Post on ‘Time & Money’

Hunter Walker

Like many in the venture community, especially us newer investors, I enjoy Fred Wilson’s “process” posts, where he shares a POV on the practice of our profession. Like we do at the seed stage, USV almost always plays the role of “ lead investor.”

Our Investing Manifesto at NextView

Rob Go

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. We are first and foremost pre-traction investors. Lead investors are few.

The Right Way To Get Funding From Family And Friends

Startup Professionals Musings

Yet they tend to ignore this problem, and move on quickly to professional investors. They don’t realize that most Angel investors and venture capitalists will also decline to be first, if you have no commitment from friends and family.

The Gust-DEMO Fall 2012 Scholarship

Gust

The Gust-DEMO scholarship gives you and your company the chance to launch in front of a world-renown audience of leading investors, top enterprise and consumer technology press, and big company strategists. As part of your application, you will create your startup profile on Gust, which you can return to in the future to manage all of your investor relations needs.

Congratulations to Upwork

A Crowded Space

Very shortly after I joined, Greg Gretsch (now my partner at Jackson Square Ventures) co-led oDesk’s Series A along with Venky Ganesan (partner at Menlo Ventures and lead investor in Rev.com). A huge congratulations to the entire Upwork team on a successful IPO!

My Obsession With The Product

Feld Thoughts

The great companies that I’ve been an investor in share a common trait – the founder/CEO is obsessed with the product. Over the next six months we interacted regularly about the product and when he was ready to start fundraising, I quickly made him an offer and we became the lead investor in the round. For some reason I’ve been doing a lot of interviews lately. In many of them I get asked similar questions, including the inevitable “what makes a great entrepreneur?”

A primer on convertible notes, convertible securities, and equity

Hippoland

If this is your first time raising money, the mechanics of how investors buy into your company can be very confusing. Equity Traditionally, investors have invested in companies to receive equity, or shares in a company. Usually, an equity round is kicked off by a “lead investor”.

[Event] [Europe] Red Herring Top 100 Europe Awards 2011

YoungUpstarts

Red Herring award winners and finalists who do not make it into the winner’s circle will be invited to present their innovative ideas and technologies to an audience of leading investors, entrepreneurs, financiers, and corporate strategists.

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VC’s Are Not Your Friends

Steve Blank

One of the biggest mistakes entrepreneurs make is not understanding the relationship they have with their investors. One day I got a call from my two investors, “Hey Steve, we’re both going to be up in San Francisco, lets grab lunch.” I liked my two investors.

An experienced coach has seen your movie before.

Berkonomics

Entrepreneurs will have a relative willing to devote time, a school friend with business experience, professionals who charge for the service, investors with a reason to promote your success and more. Business coaches come in all sizes and shapes.

Red Flags To Avoid When Talking About Competitors

Startup Professionals Musings

One of the most important questions you will be asked by potential investors is how your solutions beats the competition, not just today, but over the three to five year life of their investment. That implies competitive now, a strong barrier to entry, and the potential to stay in the lead.

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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.

How would you break down the process of raising an angel round of investment in 5-10 steps?

Gust

Understand what investors are looking for , what they usually invest in, and why. This is the case for two reasons: first, because the bare fact is that investors simply do not fund ideas. The second reason is that investors want to know that YOU believe in your own startup…and the best way for you to demonstrate that is to show that you have personally put your own money where your mouth is. Your goal in all this is to try to find a lead investor.