Securing an early commitment from investors is a significant milestone, but it's just the beginning. Here are the steps to take you from the first investor to getting the deal closed:

🛼 Get a lead investor. A lead investor provides half or more of the funding and brings credibility to the table, as other investors will want to invest where a recognised leader has already jumped in.

Why you need a lead investor:

• They make a substantial investment (at least 25% of the round).

• They have sufficient industry expertise.

• They negotiate terms suitable for all investors.

• They serve on the company’s board.

• They help find other investors for current and future rounds.

🛫 Agree on timing and details. Make sure that you communicate at this stage. Provide full materials, make sure documents are free of errors and reflect your ‘online’ image, and show realistic results achieved. Keep clear on the communication schedules and ways of sharing data. Use automated marketing tools to personalise outreach and follow-up.

Include detailed materials about every aspect of your business. Your documents and online presence will both be scrutinised by investors, who will check out your reputation and past. The best approach is to be clear about everything and to avoid being vague. Keep any promises you might make realistic and don’t waver with your message to those who are investing in you.

Develop consistent schedules for checking in and sharing data. Infuse good news and bad. Communications with investors don’t have to be filled with sunshine. Giving them the full story – the progress and the setbacks – will build their trust and make the relationship stronger.

Make sure all the legal documents are properly reviewed, including term sheets, shareholder agreements, and similar documents.

🎢 Coordinate the execution of term sheets and key docs. Ensuring that lead and follow-on investors are ready to sign by the date you’ve set is the key to keeping the momentum of a round going and closing it efficiently.

Assuming the investment contract and all documents are signed, investors go through a closing, which is a date and place where all documents are signed between the investor (or all investors) and the entrepreneur. On average, budget for about 4 months for you to close your round. 

Approximate timeline:

• Identifying investors: 2–4 weeks.

• Confirm interest: 2–4 weeks.

• Investment committee approval: 1–4 weeks.

• Negotiate term sheet: 1–2 weeks.

• Due diligence: 2–4 weeks.

• Investment contract & SHA: 1–2 weeks.

• Receiving funds: 2 weeks.