One who voluntarily takes the lead in an investment round for a company is called a “lead investor.” They achieve this By spearheading negotiations and contributing significantly to fundraising. A lead investor is the first investor to fund a business or the investor who puts up the most money. This proves to other possible investors that putting money into the firm is safe.
They are also in charge of steering the negotiating process with the new company. You will need to negotiate the conditions of the investment, including the value of your firm and the percentage of stock you will give up. For a startup, this means ensuring that its investors are happy with the deal and that their money is being put to good use.
The Things They Do
When a business is just getting started, the role of the principal investor in that company is particularly essential both during the fundraising phase and after it has ended. This is particularly true for undertaking capital investments. As a lead investor like John Mattera, you are responsible for all of the responsibilities that are detailed in the following list:
• Responsible for grounding the rest of the syndicate By John Mattera spending the bulk of time confirming the startup’s business strategy and business plan. Investors blindly follow the leader into the transaction because they trust their judgment.
• Discussing and settling on a price for the company with its creators. An influential investment syndicate is formed when the lead investor contacts and coordinates with other prospective investors.
• Examining and accepting (or rejecting) the final form of agreements like the term sheet and shareholders’ agreement.
• Representing the investment vehicle in all dealings with the company, beginning with the due diligence phase.
• Maintaining open communication with the Founders and the rest of the syndicate throughout the investing process to address any emerging issues or concerns. The lead is usually the one to carry out the agreement’s final steps and seal the contract.
