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Who is a lead investor?

Last updated on March 23, 2023

A lead investor is a person who is communicating between the company and the other investors and usually is committed to investing themselves as well.

They work with the company to set up the funding round terms and help the company to determine its pre-money valuation. The lead investor also provides their knowledge and expertise to make sure that the round is closed properly.

For a startup looking for capital from investors, it is really important to have a lead investor who, if not an expert in the field of the start-up, is at least very familiar and knowledgeable about it. Making sure that your lead investor knows what metrics matter the most in your field and who is your target market can make a difference in the end result.

Usually, a lead investor invests a substantial amount of the round, around 30%-80%. There are instances where the lead investor does not contribute the largest stake in the round. On Funderbeam, if a lead investor is leading an investment round, they are required to invest 10% of the minimum amount. A company has to have 30% of pre-commitment of their minimum target when starting a round on Funderbeam.

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