Article · 9 min read

How do I find a lead investor? (Part 1)

Nivi · Venture Hacks Free Intermediate

This is the canonical argument for why you line up a lead first: a lead takes at least half the round, negotiates the term sheet, and gives the smaller angels the social proof to commit fast. It also names the two mistakes that trap founders (not name-dropping who else is in, and hunting for a lead when you should mass-syndicate), which is exactly the six-months-herding-people trap to avoid.

• A real lead wants half or all of the round and negotiates the terms, so followers pile in on the same paper instead of each renegotiating
• Structure the raise as if you will not get a lead: generate your own terms, circulate a term sheet once commitments accumulate, and set a hard closing date
• 'Go find a lead' is often a polite pass, so read it as a signal, not an instruction, and keep your syndicate momentum going