The one who holds the voting rights for your community round
*Last updated: November 11, 2022 8:22 AM (EST) ***• Estimated read time: 6m 16s
The bare-bones definition of your Lead Investor on Wefunder is someone who:
Say you raised a $2M community round from 2000 investors.
Wefunder rolls those 2000 investors into a single line on your cap table using what’s called an SPV (Special Purpose Vehicle).
In the future, whenever your company needs to authorize a corporate action, your lead investor will vote on behalf of the 2000 members of the SPV, representing that $2M share of your cap table.
Your lead investor can talk to the other investors in the SPV, but they don’t have to. When the other investors in your SPV invest, they entrust their voting rights to the lead investor.
<aside> 📌 Learn more about corporate actions that trigger a vote
Authorizing SAFEs converting to equity, follow-on financing, acquisitions, and other liquidity events are all examples of corporate actions that would trigger a vote (in which the lead investor would participate).
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A lead investor in the VC industry is not the same as a lead investor on Wefunder. The only thing they have in common is their name.
A VC lead investor sets the terms of the round, gets the majority of the carry from the round, and holds the flag for the entire raise. Typically, a lead investor in a VC round is a VC firm rather than an individual.
A Wefunder lead investor holds the voting rights for all the investors in the SPV—that’s it. The lead investor on Wefunder needs to be a person, though the money for their investment could come from a fund. They don’t get board rights. They don’t get directive over your roadmap. But at some point before a liquidity event, you’ll need to turn to them and go, “We’re going to do this. Do you agree?”