Process guide
Closing a round
What happens between a signed term sheet and money in the bank, the documents involved, and the filings and records that follow a close.
A signed term sheet is an agreement to agree. Closing is the point at which the round becomes real: definitive documents are signed, the company's charter is amended where needed, investors wire money and the company issues securities. This guide covers what happens between the two, the documents involved, and the filings and records that follow.
The mechanics described are those of a U.S. (usually Delaware) corporation. Other jurisdictions use different documents and filings.
From term sheet to close
After the term sheet is signed, investor counsel usually prepares the first drafts of the documents (in many U.S. deals, based on the NVCA model set) while the lead finishes due diligence. Company counsel reviews and negotiates, prepares the disclosure schedule and gathers approvals. Most of the elapsed time goes into these two parallel tracks; signing and funding themselves can happen in a day.
Definitive documents in a priced round
The National Venture Capital Association publishes free model documents widely used as the starting point for U.S. venture financings. Its current set includes a certificate of incorporation, stock purchase agreement, investors' rights agreement, voting agreement, and right of first refusal and co-sale agreement (NVCA Model Legal Documents page, checked 2026-10-26). Each deal adapts them; what follows describes their roles.
| Document | What it does | Founder focus |
|---|---|---|
| Stock purchase agreement | Investors agree to buy the preferred at the agreed price; the company gives representations and warranties, qualified by a disclosure schedule; sets closing conditions and any additional closings. | The disclosure schedule: disclose every exception accurately. |
| Amended and restated certificate of incorporation | Authorizes the new preferred and sets its rights: liquidation preference, conversion, anti-dilution, protective provisions, board election rights. | The economic and veto terms live here; check them against the term sheet line by line. |
| Investors' rights agreement | Registration rights, information rights, pro rata rights, company covenants; many rights limited to "major investors". | Reporting promises you must keep; size of the major-investor threshold. |
| Voting agreement | How holders vote on board seats; usually the drag-along. | Board composition; who can trigger the drag-along and on what conditions. |
| Right of first refusal and co-sale agreement | Company and investor rights over founders' (and other key holders') share transfers. | Which holders are bound and what transfers are exempt (for example estate planning). |
Rounds often also involve an amended option plan (if the pool is increased), indemnification agreements for new directors, and, for some funds, a management rights letter. Series Seed and other short-form templates exist for smaller priced rounds, with fewer documents and lighter terms.
Board and stockholder approvals
In a Delaware corporation, amending the certificate of incorporation requires a board resolution declaring the amendment advisable, followed by approval of the holders of a majority of the outstanding stock entitled to vote, plus any separate class votes the law or the existing charter requires; the certificate of amendment is then filed with the Delaware Secretary of State (Delaware General Corporation Law §242, checked 2026-10-26). A restatement under §245 integrates all provisions into one document, which is why venture charters are usually "amended and restated".
Both approvals are normally given by written consent rather than at meetings. Unless the charter or bylaws restrict it, the board can act by unanimous written consent (§141(f)); unless the charter provides otherwise, stockholders can act by written consent of holders with the votes needed at a meeting (§228), with prompt notice to those who did not consent. The board consent typically also approves the stock purchase agreement and related documents, the share issuance, any option-pool increase, and the reservation of common shares for conversion.
Closing mechanics
Closing deliverables
- Signature pages for every agreement, collected in advance and held in escrow by counsel until closing.
- Certificate of amendment or restated certificate filed and effective in Delaware (filing usually happens on the closing date, before shares are issued).
- Board and stockholder consents, signed.
- Closing certificates where the stock purchase agreement calls for them: typically an officer's certificate confirming the representations and conditions, and a secretary's certificate attaching the charter, bylaws and resolutions; often a good-standing certificate from Delaware.
- A legal opinion from company counsel, where required; many early-stage rounds omit it.
- Wire instructions confirmed directly with the company by phone through a known number, not by email alone.
- Updated cap table showing the post-closing position, agreed with investor counsel.
Signature pages and wires
Signature pages are usually signed electronically and released when every condition is met. Investors then wire funds, and the company confirms receipt. Wire fraud using spoofed emails with altered bank details is a known risk around closings; verify instructions by a call to a trusted number and confirm the first small transfer if the amount is large.
Single close, multiple closings and SAFE rolling closes
A priced round often has an initial closing with the lead and then permits additional closings for other investors on the same terms, within a period and up to an amount set in the stock purchase agreement. SAFE rounds work differently: each SAFE is a separate contract, so a company can accept money as each investor signs, a rolling close. The convenience has a cost: each new SAFE may change the dilution others expect (see post-money SAFE), and a long-running SAFE round can make it hard to tell when the "round" ended for Form D and cap-table purposes.
Post-closing tasks
| Task | Deadline or timing | Notes |
|---|---|---|
| File Form D with the SEC (Regulation D offerings) | Within 15 calendar days after the first sale; next business day if that falls on a weekend or holiday | First sale is when the first investor is irrevocably committed, which can be before the closing date. No SEC fee. An amendment is needed annually if the offering continues for more than 12 months, or when certain information changes. |
| State notice filings | Varies by state | Federal law preempts state registration for Rule 506 offerings, but states may require notice filings and fees, generally where investors are located. |
| 83(b) elections for any new restricted stock | No later than 30 days after the shares are transferred | Relevant if founders' or others' shares were re-vested or restricted stock was issued in the round; preferred bought by investors outright is not usually subject to vesting. |
| Issue shares: certificates or book entry | At or promptly after closing | Delaware permits uncertificated shares if the board so provides; restrictive legends or notices apply either way. |
| Update the cap table and stock ledger | At closing | Including SAFE and note conversions, new pool, and new conversion prices. |
| Compile the closing set | Shortly after closing | Fully executed documents, consents, filings and wire confirmations, kept in the data room for the next round. |
| Calendar ongoing obligations | From closing | Information-rights deliveries, board meetings, pro rata notices for the next round, annual Form D amendments where applicable. |
Sources for the deadlines: SEC, "Filing a Form D notice" (last updated March 17, 2026) and "What is Form D?" (last updated April 24, 2026); SEC Rule 503 (17 CFR 230.503); IRS Form 15620 instructions (Rev. 4-2025) and Treas. Reg. §1.83-2(b). All checked 2026-10-26.
Closing a SAFE round
A SAFE round has no charter amendment, no stockholder vote and usually no investor counsel. Closing each SAFE means: the board approves the SAFEs (often a single consent covering the round, with a maximum amount); the investor and company sign; the investor wires; and the company records the SAFE on its cap table. The Form D clock still runs from the first sale, and state notices still apply. Keep every signed SAFE and side letter together; they are among the documents most often missing when the priced round arrives.
For the securities-law background behind these filings, see U.S. securities law for founders. For the documents investors will check before signing, see the data room.
Sources
- Model Legal Documents, National Venture Capital Association. Cited for facts; not reproduced.
- Delaware Code Title 8, Chapter 1, Subchapter VIII (sections 241–246), State of Delaware (Delaware Code Online). Cited for facts; not reproduced.
- Delaware Code Title 8, Chapter 1, Subchapter VII (section 228), State of Delaware (Delaware Code Online). Cited for facts; not reproduced.
- Delaware Code Title 8, Chapter 1, Subchapter IV (section 141), State of Delaware (Delaware Code Online). Cited for facts; not reproduced.
- Delaware Code Title 8, Chapter 1, Subchapter V (section 158), State of Delaware (Delaware Code Online). Cited for facts; not reproduced.
- Filing a Form D notice, U.S. Securities and Exchange Commission. Public domain (U.S. federal government work).
- What is Form D?, U.S. Securities and Exchange Commission. Public domain (U.S. federal government work).
- 17 CFR 230.503 — Filing of notice of sales, Electronic Code of Federal Regulations (National Archives). Public domain (U.S. federal government work).
- Private Placements - Rule 506(b), U.S. Securities and Exchange Commission. Public domain (U.S. federal government work).
- Form 15620, Section 83(b) Election (Rev. 4-2025), Internal Revenue Service. Public domain (U.S. federal government work).
- 26 CFR 1.83-2 — Election to include in gross income in year of transfer, Electronic Code of Federal Regulations (National Archives). Public domain (U.S. federal government work).