Leading a Deal End to End

Supporting vs. leading

As an associate, you make a partner's decision better. As a lead, the decision is yours to bring, and so is everything around it.

At most firms, the lead's name is also the one attached to the deal in the firm's track record, and in any future partnership conversation (module 6.5).

Getting to conviction early

The lead's real edge is time. By the time a round is competitive, the investors who win have usually formed a view weeks or months earlier. They met the founder before the raise, tracked the company, and did the thinking on the market (module 6.4). A process that starts at the pitch meeting is already behind.

The practical version: keep a short list of companies you'd lead if they raised tomorrow, stay in touch with those founders without asking for anything, and know what you'd need to believe to say yes.

Pre-wiring the partnership

Investment committee should rarely be where your partners first hear about a deal. Leads who get to yes bring the key partners in early: a short note after the first meeting, a partner on the second call, the biggest risk raised by you before someone else raises it. By the time IC meets, the questions are known and the memo answers them.

IC is for testing the case, not introducing it. If a deal would surprise the room, it isn't ready.

What founders weigh

When more than one firm wants in, founders are choosing a partner for a decade, not just a price. The usual factors:

• Conviction and speed. Who understood the business fastest, and who can commit without dragging the process out.
• The individual partner. Who will sit on the board, and what they're like to work with.
• References. Founders call your other founders, including the ones whose companies didn't work out. Back-channel diligence runs both ways.
• Relevance. Sector knowledge, customers, a network that matters to this company.
• Terms. Price matters, but so do board composition, pro rata and the control provisions (module 3.1).
• Follow-on capacity. Whether you can support the next round, including through a hard patch.

What you can control in a competitive round

You can't control the other firms. You can control:

1. Speed with substance. Move fast, but show your work. A founder should leave every meeting feeling understood.
2. A specific "why us." Not a list of services. What you'd actually do in the next 18 months, and who you'd introduce them to.
3. Clean terms. A simple term sheet close to market norms signals you won't fight about the small things.
4. Your references. The founders you've backed are your pitch. Treat every one of them as if a future founder will call them, because one will.
5. Your discipline. Know your walk-away price before the process starts. Losing a deal on price is sometimes the right outcome (module 6.2).

Running the round as lead

Once the founder signs your term sheet, the lead does most of the work of getting to a close:

• Confirmatory diligence. Legal, financial and technical checks on what you were told.
• Syndicate. Deciding, with the founder, who else participates and at what size.
• Documents. Your counsel and the company's negotiate the definitive agreements, usually starting from the NVCA forms in the US or the CVCA forms in Canada.
• Closing. Board and shareholder approvals, an updated cap table, wires.

The term sheet usually includes an exclusivity ("no-shop") period to get this done. A long, unexplained delay after a signed term sheet is a bad sign for everyone.

▸Worked example — a pre-IC checklist

Question	Where the answer lives
If this works, can it return the fund?	Ownership and exit math (module 6.2)
What has to be true, and what's the evidence for each?	The memo and diligence notes
What's the biggest risk, and who raised it first?	You, before IC
What are we paying, and what's our walk-away?	Term sheet and pricing notes
How much are we reserving for this company?	The reserve plan (module 5.2)
Who takes the board seat, and do they have room?	Partner time and board count (module 6.3)

What this means for you

Leading is a skill you build before your title says you can. Ask to run the process on a deal a partner is sponsoring: the founder communication, the IC preparation, the first draft of the term sheet. When the time comes to lead on your own, you'll have done every step at least once.