You Probably Don't Need A Lead Investor For Your Pre-Seed
Excerpt #6 From My Upcoming Book
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A common trap I see founders fall into—especially at the pre-seed and seed stage—is believing they need a “lead investor” before they can start collecting checks.
Founders will say things like, “I have a few investors who want to invest, but they’re waiting for me to get a lead.” This seems like a reasonable thing to say—after all, the word “lead” sounds official. But in most early-stage fundraises, especially those on SAFEs or convertible notes, this idea is simply wrong. And misunderstanding it can cost you weeks or months of momentum.
First, a lead investor is not the first investor. A true lead investor is someone who sets the terms and prices the round—typically in an equity (priced) round. They negotiate the valuation, write the biggest check, and help bring others in under the same terms. That’s what “leading” means.
But most pre-seed and even many seed rounds today are raised on SAFEs (Simple Agreements for Future Equity) or convertible notes. These are not priced rounds. That means there’s no valuation being negotiated upfront, and therefore, no need for someone to “lead” in the traditional sense.
So when an investor says, “Let me know when you have a lead,” and you’re raising on a SAFE, that’s a bit of a yellow flag. The truth is, nothing is structurally stopping them from investing at any point. A good response could be:
“Actually, this round is on a SAFE—there’s no lead required. We’re taking checks now if you’re interested still”
That moment is revealing. If they say yes, they’re in. If they hesitate and want someone else to go first, it usually means they’re not that interested or they just don’t want to take that level of risk yet—And I don’t blame them! Investing in a company without knowing they’ll have enough capital to operate in 3 months is very risky.
As an investor, it makes sense to back a startup in a way that gives the founder enough runway to reach their next milestone. I used to think that when investors waited for a lead, it was because they didn’t really love the deal. And sure, that can be true—but it’s also just good business. It’s smarter to invest as part of a full round, not as a one-off check or between rounds, where the company might still be capital constrained.
With that said, I’ve seen too many founders delay their entire fundraise, holding out for a mythical “lead” that doesn’t exist because of the instrument they’re using. In SAFE-based rounds, you don’t need a lead. What you need is a first investor. And there are PLENTY out there who will be first check in and don’t need external validation or derisking.
And that first check could be $5K. It doesn’t matter. The second check could be $100K. It also doesn’t matter. Until your round is priced, an investor can technically invest at any point if you want them to.
So, if you’re raising on a SAFE or a convertible note, stop chasing a lead investor. Chase the first investor instead. And once you get them? Stack another, and another.