Securing a lead investor in your round of funding sets the table for follow on investment by others.
First let’s define what is a lead investor:
A lead investor is a company’s principal capital provider. Lead investors play a much more critical role than that of any other investor. Regardless of what round, whether that be the angel round, venture round or hedge fund, finding a lead investor can be invaluable to a company. A lead investor takes the lead in representing a funding round, they can influence follower investors to get on board and thus increase the value of the funding round. Beyond finance, lead investors can also offer invaluable advice towards the company’s growth.
In the impact world, the lead investor has an additional component which is the passion to create measurable impact in the world.
Impact founders and CEOs who are unable to secure a lead investor have a heavier lift to secure investment because they don’t have the pull of the lead investor.
The key to identifying prospects to become the lead investor in your round, is to do your homework. Most founders think that just any investor has the potential to help lead their funding round. This couldn’t be further from the truth. The key is to find an investor that has some type of experience in your industry, so they will quickly understand the problem that you are solving, and your solution. Investors that fit the descriptions below will more likely be willing to meet with you to discuss your company:
- Has either previously invested in, founded, or been an early employee at a company in your industry
- Invests in companies at your stage, whether it is seed stage, series A or beyond
Here are 4 Lead Investor qualities to keep in mind:
- Interest in your industry segment
- Interest in the specific impact your business model serve
- Depth of financial resources and stage aligned
- Time available to serve as lead and beyond
Want to get prepared to raise capital successfully?
Download our Free Fundraising Checklist Here: https://thechangeagenthub.net/fundraising-checklist
Once you receive the checklist you’ll be redirected to a video walkthrough so you can use this checklist most effectively. And you’ll also be invited to check out our 9-step fundraising preparation roadmap with detailed information called Impact Incubator Immersion. This program is the exact process all our impact clients have used to raise capital successfully.
