What to do with non-lead investors + Fundraising Fieldnotes - 10.22.21
Hey - it’s Jason Yeh 🕺🏻
This is my Friday recap of thoughts I’ve had while helping founders solve their fundraising challenges this past week (10.22.21)
If you have any questions, please reply! I try to get to every comment/question I get :)
On to the Fieldnotes for 10.22.21…
Non-lead investor says they’re interested but doesn’t offer to make intros to leads 🚩🚩🚩🚩🚩🚩
Calling out and explaining this red flag was originally going to be the first example in a piece covering a series of short red flags within fundraising. Instead of going a mile wide and an inch deep within a stale meme, I’m going to hone in on this somewhat ambiguous concept.. It’s a great opportunity to share more details on:
What a non-lead investor is
How they operate / What you should expect
How you can leverage them
What is a non-lead?
To start, it would be helpful to understand what a non-lead investor is. While simple sounding, this is not so crazy of a starting point because many founders I talk to don’t realize that “Lead Investor” isn’t a formal term that the NVCA or some set of laws defines. It has a loose definition at best. In my essay comparing leads with co-leads I offered this simple description of a lead investor:
In the most traditional sense, a pure lead investor is 1) going to have at least 50% of the round and 2) will set the terms
So with that directionally accurate description of a Lead, a non-lead is a bit easier to define: An investor who has less than 50% of a round and who won’t provide you with a term sheet.
How they operate / what you should expect
Storytelling is important
Unpopular opinion: doing things to sound good to investors will help your business
Till next week. Stay adamant and be chased.
p.s. DYK Squid Game is reportedly set to drive $900MM of value for Netflix??
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