Once we are both fully satisfied with the deal on the table, we will be ready to execute. An equity investment is actually a somewhat complex securities transaction, so that process is slightly more complicated than signing a contract. Several steps must occur in a specific order:

  • Resolutions. The company must pass Shareholder and Board resolutions consenting to the investment. It may also need to pass various other housekeeping resolutions such as resetting founder vesting and changing the number of shares allocated to the equity incentive plan.
  • Signatures. We both sign a couple of different documents. In fact, if there are other investors in the round, everyone will need to sign a variety of documents.
  • Certificate of Incorporation. You must submit a revised COI to the State of Delaware that at least authorizes a new preferred series of stock. Your counsel may advise additional changes.
  • Fund. We have our bank wire money to the company's account.
  • Certificates. You issue corresponding stock certificates and send them to us.

Total Elapsed Time

Theoretically, we could lead a round from first meeting to closing in 30 days... In practice, completing all the steps averages about 90 days from the time of first introduction, but with a substantial amount of variability. If you already have terms set and a somewhat thorough due diligence package completed, we can turn around an investment in weeks.