Startup Funding Espresso – Responsibilities of a Lead Investor

Responsibilities of a Lead Investor

Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing.

The lead investor leads the diligence and negotiations with the startup.

Here’s a list of responsibilities of a lead investor:

Recruits investors to join the diligence team and divides up the work.

Engages in the process of diligence as well. 

Organizes meetings with investors and the startup team.

Keeps the investors informed of the progress of diligence and deal terms negotiations.

Brings in an attorney to paper the investment transaction.

Helps select the board of directors if a board will be formed.

Keeps the startup team informed of the investors concerns and care abouts.

Provides mentorship to the startup throughout the diligence process.

Negotiates the valuation and key terms of the deal such as liquidation preferences.

Helps find additional investors if needed.

Represents the interests of all the investors throughout the process.

A lead investor makes it easier for the startup by negotiating the terms directly rather than dealing with multiple investors.

Consider these responsibilities before taking on the role of a 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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