Glossary · Fundraising process · Updated 28 August 2026
The lead investor sets the price of the round, runs due diligence, drafts the term sheet and usually writes the largest cheque. The other investors, called followers, accept the terms the lead negotiated without redoing the audit work.
Finding the lead is the hard part of a raise. While it is missing, conversations circle: nobody wants to set a price, everyone waits to see who commits first. Once a lead signs, the rest of the round often fills in weeks, because followers are buying the lead's conviction as much as the company.
The lead typically brings 50% to 80% of the amount. In exchange they take a board seat or observer status, enhanced information rights, and a say over structural decisions. It is a deliberate trade: you give up governance in return for speed and credibility.
A round with no lead, funded entirely by angels, is workable at pre-seed. Beyond that it gets hard, because nobody owns price-setting or the coordination of the twenty signatures a closing requires.
Example: how a €1.5M seed round is composed
A typical split between lead and followers on a European seed.
| Lead fund | €1,000,000 — 67% of the round |
|---|---|
| Angels (5 individuals) | €350,000 |
| Follower fund | €150,000 |
| Total raised | €1,500,000 |
| What the lead gets | 1 board seat, monthly information rights |
| What the lead does | Sets price, runs diligence, drafts the term sheet |
| What followers do | Review the existing term sheet, decide in 2–3 weeks |
Followers do not redo diligence; they rely on the lead's. That is why a round can spend six months looking for a lead and then fill up in three weeks.
The common mistake
Approaching followers first because they are easier to reach. They will almost always answer "come back when you have a lead", and you will have spent your first contact with them for nothing.
Frequently asked questions
Can you raise without a lead investor?+
At pre-seed, yes: a €200–500K round can close with angels only. From seed onward it is rare, because someone has to set the valuation, carry the legal negotiation and coordinate the closing.
How much of the round does a lead take?+
Usually 50% to 80%. Below 50% their influence over terms is hard to justify to the other investors, and the round starts behaving like one with no lead at all.
Related terms
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