A lead investor is the first investor in a funding round, setting the terms and attracting other investors. Watch the full video — free, no account needed.
A lead investor is the first investor in a funding round, setting the terms and attracting other investors. They play a crucial role in negotiating terms, handling legalities, advising the startup, and facilitating future fundraising and investor relations.
hi everyone this is alejandro cremares and today we're going to be talking about how to find a lead investor [Music] so a lead investor is ultimately going to make it or break it on any equity round of financing is one of the most important things and is essentially what makes 99 of the rounds actually happen so with that being said let's get into it so what solid investor so a lead investor in essence is that investor that is going to come in and is going to lead your round it's going to be the first money in and essentially it's going to really help in creating that umbrella in which everyone else is going to come in and invest under whichever those terms are because ultimately the terms of your round are going to be negotiated by the lead investor and those are going to be the same terms in which everyone else is going to be investing under so in terms of what does the lead investor
do so there's many things and in fact i'd like to describe them and break them down for you and those are the following things so they negotiate terms they hire a law firm to handle the paperwork they advise your startup they take a seat on the board they make introductions and connections to perhaps other investors they help structure future fundraising rounds they help manage other investors they bring other investors financing and distribution channels they participate in follow-up funding rounds amongst other things so now who makes a good lead investor so at the end of the day you're gonna have two different types of investors you're gonna have the follower which is going to be the one that invests if other in people invest in your round and then you're going to have the lead so in terms of the lead this is going to be someone that really believes in your mission in where you're
heading someone that has that domain expertise that can really contribute and also someone that has a very good network that essentially you can leverage for either future fundraising rounds for maybe getting your company acquired maybe other people you may need to recruit that they have in their network and then also for distribution so essentially this is someone that brings much more than the money itself essentially those networks that you can leverage so that in 18 to 24 months which is where you're going to be hitting your next financing cycle they can really help to accelerate unlocking whichever milestones that you have in front of you so how much does a lead investor put in so a lead investor is going to invest anywhere between 20 to 30 of your round they don't care about anyone else they don't care about who else is investing they just want to invest they believe in you they
believe in your project and they're just gonna jump in and that is essentially a lead investor they're just going to put whatever amount of money is required to really kick start the round of financing and in many instances they want to take over the entire round of financing when it comes to when to start the search you need to start as soon as you have the idea of maybe doing a round of financing i mean if you think that in 18 to 24 months you're going to require more money or in six or 12 months or whatever that is you need to start asking for meetings with those people that you think that are going to be a good fit essentially the way that you go is you go for asking for advice for really building the relationship and essentially for for for this coming from them you know eventually you know like when you were going with them and following up every couple of weeks to tell them you
know like how great you know like their advice and their feedback really you know like once implemented how incredible the outcome was they're going to feel that they're part of it they're going to feel like they're helping you to build a business and it's what gets them excited and it's going to come from them and essentially say hey by the way are you looking for money and then at that point you're going to say yes they're going to put whatever amount of money that is and then you're going to bring the other people that were giving you advice to also jump in and that's how you establish the sense of urgency so at the end of the day when it comes down to really searching for these people you want to do it as soon as possible as soon as you know that you're going to have to raise a round of financing there are many ways to find a lead investor when it comes down to where can i find a
lead investor right so those are the following ways in which you can really find that lead investor and get them engaged so you can get those lead investors by introductions by other entrepreneurs and investors who have a history of leading funding rounds online investment platforms equity crowdfunding etc networking events or perhaps that's offline or online social media networks and you can even you know like find their email or their linkedin profile and just send them a note directly again you don't need to find a lead investor to get the round started you know if you don't see that you have a lead investor coming in you can always build a syndicate yourself meaning a group of investors that may have an interest and give them fair terms so that they come in and you can get that round started so hopefully you like this video if so make sure that you hit the like button leave a comment
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