How do I convince my interested investors to fund as soon as possible? originally appeared on Quora: the place to gain and share knowledge, empowering people to learn from others and better understand the world.
We're all on different deadlines when it comes to investors and entrepreneurs.
Maybe a fund has a deployment schedule or promises it's made to its investors that it wants to keep. Maybe an entrepreneur wants to get on with focusing on the business and bring a successful investment round to a close. Maybe an angel investor has no deadlines to keep but their own and simply is not in the same hurry an entrepreneur is. However, we're all in this together.
Assuming your investors have completed their due diligence, they are satisfied with the due diligence, and they have reviewed and signed the legal documents, here are some ways to encourage your investors to fund promptly:
- Be clear about your process. Clearly communicate it to the investor - in person, over the phone, by email - whatever their preferred mode of communication is.
- Ask the investor what their timing and process is (if they have a process).
- Make it easy for the investor to fund. Meet them in their neighbourhood to pick up a cheque. Send them wire transfer details.
If they haven't completed due diligence, you need to find out what other information they need to satisfy themselves to invest.
If they haven't signed documents yet, you need to ensure they have had sufficient time to review the documents as well. Make it easy for them to sign. Using an electronic signing application such as DocuSign or EchoSign is typical these days, but confirm that your legal counsel accepts this and that your investors find this convenient. Pre-populate documents and make it clear to your investor where to sign. Even though your investor may have tons of experience funding deals, documents often look a little bit different across different deals, so make it easy for them to locate the places they need to sign.
Personally, I try to fund promptly and set expectations for the entrepreneurs in which Pique Fund invests. And then I do what I say I'm going to do because it reflects badly upon me and Pique Fund if we are not clear and not considerate about an entrepreneur's time and effort in trying to get an investment round closed.
Best of luck!
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