Here’s Everything That You Need To Know About Lead Investor

Here’s Everything That You Need To Know About Lead Investor

Lead Investor

A lead investor, typically the primary contributor in a funding round, holds substantial sway over the company’s direction and strategy.

Who Is A Lead Investor?

In the context of institutional funding, a lead investor is a person or an organisation that plays a central role in a funding round. They are the largest investor in the funding round and can have a significant influence on the direction and strategy of the company. 

They are responsible for coordinating and organising the funding round, including identifying and recruiting other investors, negotiating the terms of the investment, and closing the deal. In a venture capital funding round, the lead investor is the venture capital firm that takes the lead role in the investment process.

Some of the top ones in India include Peak XV Partners Advisors India, Accel Partners, Tiger Global, Nexus Venture Partners, SAIF Partners, and Kalaari Capital. These firms have been actively investing in Indian startups across various sectors, including ecommerce, fintech, healthcare, and education.

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What Are The Responsibilities Of Lead Investor?

The responsibilities of a lead investor can be divided into three stages — before investment, during investment, and after investment. 

Before investment, s/he validates the startup’s business plan, negotiates investment agreements, and gets in touch with follow-up investors. During investment, he discusses and agrees on the terms of investment with the company and other investors to ensure both sides are satisfied.

After investment, s/he represents the investors and keeps them updated with key metrics. As for the company, the lead investor reviews the progress, participates in board meetings, and provides guidance and mentorship.

The Responsibilities Of A Lead Investor Include:

  • Coordinating & Organising The Funding Round: This includes identifying and recruiting other investors, negotiating the terms of the investment, and closing the deal.
  • Validating The Startup’s Business Plan: Before investment, s/he validates the startup’s business plan and gets in touch with follow-up investors.
  • Discussing & Agreeing On Investment Terms: During investment, the lead investor discusses and agrees on the terms of investment with the company and other investors to ensure both sides are satisfied.
  • Representing Investors: After the investment, the lead investor represents the investors and keeps them updated with key metrics.