Funding: How long does it typically take to close Angel or Series A financing once the valuation and basic terms are agreed on?

A proper venture financing in silicon valley, i.e. an issuance of preferred stock, usually takes about six weeks to close from the date of a signed term sheet. I have seen it take over six months at a tech startup for a series A. Also note that it will cost around $100k (give or take) in legal fees to finish the round, and it is the startup's responsibility to pay this. This includes paying for the VC's end of the legal fees, usually ~$50k in standard terms. A smaller round does not necessarily move quicker or cost less. It ideally takes three to six weeks to close, and this is what your investors and lawyers will tell you. It can take much longer if there are complicated terms or a lot of negotiating involved. Companies with non-founding CEOs doing the negotiating will probably finish quicker; founding CEOs will probably take longer. A convertible note round can take less than 3 weeks to complete. If it looks like it is going to take a long time and cost more than $25k, rethink doing a note and the investors you're doing it with. Be sure to have a few months of runway available when you sign a term sheet. Things that help speed up the process from the startup end: - Remember that a seed or series A is as much about building a relationship as getting money into your company, and once the basic terms are agreed upon, try not to nitpick. If you have a good investor then they won't nitpick either. Steadfast negotiating will extend the process considerably-- as much as one to two days per item negotiated-- and may not do you any good in the long run. Negotiate only the most important items for you and your team. - Have your company's legal documentation very well organized. Have your lawyers prepare a file for you in advance that includes all documents relating to employees, past financing, corporate structure and establishment, partnerships, the cap table, etc etc. Make sure the items in the packet have good filenames, is small enough to be emailed, and that everything is organized and there. - Make sure you and your lawyers respond to your investors and their lawyers as fast as possible. Keeping everyone from getting distracted helps immensely. - A real sense of urgency, not an imposed one, helps the most. Having product deadlines, competitive pressures, or possibly missing payroll are good examples of real urgency. Good luck!

Make sure you do a reference check on your VCs, just like they do on you.  Talk to founders of their other portfolio companies (including ones that failed.)  Ask this question before you accept the term sheet. Every VC is different, and different firms have different processes.  If it takes three months to close and you've been ramping like it would take a month, that can lead to difficult situations.  Not least the VC renegotiating the term sheet.

For a VC A-round in Silicon Valley, it'll usually take you about a month from the time you sign the termsheet till you have money in the bank. We signed ours right before Thanksgiving, and if i remember correctly it "closed" mid-January; so it took about a month and a half - but keep in mind there we 3 sets of holidays in between. Seed rounds usually go much faster, since there's a lot less due diligence and (hopefully) less expensive legal paperwork.

This is the most realistic answer even though you might not like what it says It varies but always within the same ranges.  Also "once the valuation and basic terms are agreed on means you dont have an LOI signed yet.  Here are some rules of thumb 1) you will spend 1-n months exploring the possibility.  Typically N is not more than 3 but you can easily spend 2-3 months getting to an LOI 2)  After 1 the LOI can happen fast so say 1-2 weeks 3) The definitive then takes a lot of time so say 30-45 days So all in best possible case you are looking at 2 months, I think 4-5 (from when you start) is more common.

Once a termsheet is delivered, signed and negotiated it takes between 30-90 days to complete the legal paperwork and diligence. I have raised several Series A investments from Silicon Valley, New York and Dallas investors ($5M to $11M).

Typically 30 to 60 days. Basic rule of thumb: 2x what you tell yourself it can be done in. Of course it depends on a ton of factors from the sophistication of the parties (both investors, founders and lawyers) to the where the investing cycle is on the curve (generally I see more grinding/time on terms when capital is scarce - which is not the case these days). Pick your lawyer very carefully. They play a major role in the timing and cost. A bad lawyer could cause a deal to not get done. A good lawyer at a big firm will get it done with an associate or two, take a few months, and cost $30-$50k (regardless of amount raised). An amazing lawyer will not worry about the stuff that doesn't matter, use very little associate time, and get it done faster and for less than a good lawyer. They're hard to find.

For the seed/angel round, it's really going to depend on where it came from.  If its from an angel "group", then 1-2 months is probably fair but if it's a cadre of different people or person(s) that don't do this as often...then no. Our first angel round of $200K (Boston) was 3 months from basic terms to $$ in bank and it was from two brothers.  Because they didn't do this as much, I think the sense of urgency wasn't as understood, nor were the steps to follow.

Very important to have solid lawyers on your side (like David Young - commented above /Randy Socol at DLA).  The difference between good and bad lawyers - or even well respected/connected lawyers and just good lawyers is the difference between closing quickly and possibly not closing at all.  I have seen deals closed in 2 weeks and have seen them take 8 or more.

It is generally three weeks from signed term sheet to closing, sometimes a bit less.