Alright, founders, we've made it to the final stretch of our fundraising trilogy.

You can refresh your memory on phase 1 (preparation... so crucial) and phase 2 (meetings, driving urgency, following up). Now it's time to for phase 3: closing.

A verbal commit is not a check

Once an investor gives you a verbal commit, you'll probably feel a massive sense of relief. And yes – this is a huge milestone! Congratulate yourself.

🚨 But remember: the deal is not done until it's done.

We've seen plenty of deals fall apart because the investor pulled out... often for no good reason at all.

I once shared an office with a company that got a verbal commitment from an investor for a massive amount of money. The founders went out and signed a 7-year lease on a huge office space.

Guess what happened? The deal fell through. And the founders were stuck with a rental they couldn't afford. Don't be these people.

I don't say this to scare you. I say this to remind you to keep up the momentum even in phase 3. It's crucial to get the documents signed as quickly as possible.

Getting your docs signed

When it comes to closing the deal, the type of documentation you use will make a big difference. Some startups will be able to raise on SAFEs and convertible notes. Others who are a bit farther along will raise a priced round.

Let's break those down:

1. SAFEs / Convertible Notes: These are the fastest routes for closing deals. You can get these signed almost immediately after a verbal commit. They're simple, straightforward, and perfect for early-stage startups raising smaller amounts.

1. Priced (Equity) Rounds: These could take a month to finalize. They involve a lot of back and forth with lawyers (yours and the investors).

Many founders get spoiled by the simplicity of SAFEs and convertible notes. Then, when it's time for their first priced round, they're surprised by how long the negotiations take.

I'll say it again: When you do a priced round, be prepared for a month of back and forth from lawyers editing it. That's right, ✨ a whole month ✨ of legal ping-pong. Yikes.

If you need a refresher on how SAFEs and priced equity rounds work, don't fret. This guide should help.

Annoying legal stuff

Welcome to the least exciting, but arguably most important part of closing your round. Let's talk legal stuff.

For priced rounds, prepare for a 1-2 month journey of legal back-and-forth. Your lawyers will edit. Their lawyers will edit. It's like a boring, expensive game of tennis.

One way to mitigate this back and forth? Get as much detail as possible into the term sheet upfront. This will cut back on the negotiations later on.

And now I have some bad news for you: you might be on the hook for your investor's legal fees. Yes, really. You're raising money, and you might have to pay for the privilege of giving away part of your company. Capitalism is fun!

Good news is that this is negotiable. Set a cap on what you're willing to cover. And get it in writing.

The final push

Alright, the home stretch. You've navigated the verbal commits, chosen your funding instrument, and survived the legal gauntlet. Now it's time to get those signatures and wire transfers.

Here's the plan:

1. Move Fast: The moment you get a verbal commit, have those docs ready to go.
2. Stay Organized: Keep track of every investor, every commitment, and every document.
3. Follow Up Relentlessly: Be politely persistent. Your job isn't done until the money's in the bank.
4. Prepare for Surprises: Someone might back out. That's just a fact.

Fundraising is hard, often frustrating, and sometimes heartbreaking. But it could also be exactly what you need to build something that will change the world.

So take a deep breath and remember: every successful founder has been exactly where you are right now. You've got this.