Lead investor
The investor who sets the terms, does the deepest diligence and usually takes the largest allocation.
Why it matters
Most rounds do not come together without one. Finding the lead is the hard part of a raise; followers move quickly once terms exist.
A worked example
A fund leads a $5M Series A with $3M, sets the valuation and terms, takes the board seat, and four other investors follow on those terms.
What is typical
Leads typically take 40% to 60% of the round and a board seat. A round with no lead can stall indefinitely regardless of total interest.
Related terms
Follow
An investor who joins a round on terms set by the lead rather than negotiating their own.
Read more →Term sheet
A mostly non-binding document setting out the proposed valuation, structure and key economic and control terms of an investment.
Read more →Run your raise on this
VCTerminal models these terms on your real cap table, so you can see what a term sheet pays you before you sign it.
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