Today, at LetsVenture,  we have more than 800+ angel investors from 19 countries. We have new angel investors and a lot of experienced angels – however every time a startup looks to actively build their syndicate, the “Lead Investor” ‘s role becomes critical.

Today, at LetsVenture,  we have more than 800+ angel investors from 19 countries. We have new angel investors and a lot of experienced angels – however every time a startup looks to actively build their syndicate, the “Lead Investor” ‘s role becomes critical. This blog post outlines some basics on being a Lead Investor on LetsVenture.

Who is a Lead Investor?

A Lead investor is someone who is willing to step in and don the mantle of the captain of the investor syndicate.  The Lead investor should ideally have engaged with the startup for sometime to understand the business, and see how he can support the entrepreneur. Choose to be a lead if you understand basics of angel investing, can bring in strategic value to the business – and most importantly if you are willing to commit the time to working with the startup. However only decide to lead if you love the founders and believe in what they are trying to build. Lead and Lead with Passion!

What Does a Lead Investor Do?

As a Lead investor, you play an active role in two phases.

Phase 1:  The Fund Raise Phase:

  • Be willing to spend time validating the business plan of the startup. As a Lead, some of the investors will invest on good faith
  • Set the valuation, and terms of the investment for the current round
  • Be available to other investors, if needed. Some participating investors like to talk to a lead investor to understand the invest-ability of the business, as well as look at the lead as a reference. Being a lead, your endorsement will help drive investor confidence

* At LetsVenture, we have standardized term sheets, and special provisions in the legal documentation (term sheets & share holding agreements) to enable a Lead Investor to represent the syndicate more effectively especially for the next round of fund raise.

Phase 2:  After Fund Raise, into the growth years of the company

  • Typically represent the syndicate by taking a board position in the company.
  • Play an active role in the ongoing governance of the company
  • Support with the future financing rounds.

Note: A Lead Investor is not necessarily the person who puts in the maximum capital. The Lead Investor is only a role definition – this could be a team of people (typically investors lead in pairs, so there could be a lead and a co-lead investor) Phase 1 and Phase 2 could be managed separately by two different people.

Why Be A Lead Investor on LetsVenture?

At LetsVenture, we are putting together a framework to help a Lead Investor.

  1. Construct a Syndicate Easily (online and offline tools to help bring the syndicate together with minimum effort)
  2. Seamless and high quality legal paper work via Commitment-to-Closure (Financial and Legal Due Diligence, Standardized Term Sheet and Share Holding Agreements)
  3. Program Management of closing a deal in the syndicate
  4. Office Hours Management (helps you meet startups based on your availability)
  5. Lead Investor Incentives – This is specific to LetsVenture.

If you want to know more, please reach us at shanti@letsventure.com.