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Why You Need a Lead Investor for Your Funding Round
Other investors require a lead. What are they looking for?
You’ve pitched your startup. Investors are interested. They’re telling you to contact them after you find a lead investor.
Fortunately, one of your early supporters steps up and says he’s willing to be the lead. Excited, you return to the other investors to tell them you’re ready to close the round and ask if they want to join.
When you tell them who the lead is, you never hear from them again.
What is this lead investor, and why is it so important to other investors? Who is an acceptable lead investor, and how do you find one?
Why Investors Need a Lead Investor
Let’s start by looking at your situation from the investor’s point of view.
When you pitch to me personally, I may be excited about what you’re doing, but I don’t have the time or expertise to dig into the details and determine if this is a good investment or not.
While your pitch makes sense, that’s not enough to invest with any hope of success. Someone needs to do a thorough examination of the product, market, and competition. An expert needs to review the patents. A financial professional needs to…
