(Contributed by Gordon Daugherty, Capital Factory Director)
Some investors want to be the last one to commit and few want to be the first. It’s mostly a safety and survival technique. Think about it from their perspective. The first investors to write you a check run the risk that you only get half-way to your fundraising target, which means your business is suddenly an even riskier investment than what they originally predicted. Savvy investors that write checks early in the round will intuitively take this into account, which might explain why they are being extra cautious and demanding in their due diligence.