From Signed Term Sheet to Wired Money: The Closing Process Explained

A signed term sheet is a milestone, not a finish line. From that moment to the day the wire hits your bank, you have between two and eight weeks of legal work, paperwork, and small administrative tasks that — done well — close cleanly. Done poorly, they delay the close, fray nerves, or in rare cases unwind the deal.

This article walks through what happens after the term sheet, what you'll sign, and the small mistakes that quietly cost founders weeks.

The arc, in plain language

After the term sheet:

1. Lawyers draft definitive documents. The investor's lawyers usually take the lead on the first drafts.
2. You and your lawyer redline the drafts. Negotiation back and forth.
3. Documents are finalised, signed, and counter-signed.
4. Closing conditions are met (KYC, board approvals, share authorisation).
5. Money is wired.
6. You file post-closing things (Form D in the US, share register updates, 83(b) elections, etc).

For most clean Series A rounds, allow four to six weeks. SAFE rounds can close in days; complex priced rounds with many investors can stretch into months.

The definitive documents

In a US-style priced round, you'll typically sign:

• Stock Purchase Agreement (SPA). The contract under which the new investors purchase preferred shares.
• Amended and Restated Certificate of Incorporation. The new "constitution" of the company, reflecting the new share class.
• Investor Rights Agreement (IRA). Information rights, registration rights, pro rata.
• Right of First Refusal and Co-Sale Agreement. Founder share transfer rules.
• Voting Agreement. Board composition and protective voting arrangements.
• Management Rights Letter. Required by some funds to satisfy LP regulatory requirements.

Plus, at the company side:

• Updated bylaws (sometimes).
• New option plan / amendments to existing plan if you increased the option pool.
• Stockholder consents approving the round.
• Officer certificates confirming various closing conditions are met.

The volume is real. Expect 100–200 pages of paperwork at Series A. We have a clause-by-clause breakdown: the definitive documents.

What gets negotiated post-term-sheet

You'd think nothing — that's the whole point of a term sheet. In practice, a few things still come up:

• Definitions. "Material adverse effect", "qualified financing", "fully-diluted basis" — terms that look standard but have variations.
• Exact protective provisions language. The term sheet says "consent for major decisions"; the SPA spells them out, and there can be friction in the wording.
• Indemnification scope. What the company indemnifies investors for, and what's carved out.
• Specific representation and warranties. What the company is asserting is true. Read these carefully.
• Side letters with specific investors who require special terms (e.g., a regulatory carve-out for a corporate investor).

Don't sweat every word. Do read your lawyer's redline carefully and ask "what does this mean for me?" on anything that looks unclear.

The closing checklist

A typical closing checklist at a US Series A:

• [ ] Definitive documents finalised and signed.
• [ ] Stockholder consents signed.
• [ ] Board approvals obtained.
• [ ] New certificate of incorporation filed with state.
• [ ] Investors' KYC / AML completed.
• [ ] Wire instructions received and confirmed.
• [ ] Cap table updated to reflect close.
• [ ] Stock certificates issued (or e-issued) to investors.
• [ ] Form D filed (if US).
• [ ] State Blue Sky filings (if US).

Your lawyer drives most of this. Your job is to keep momentum: chase signatures, push approvals, escalate when things stall.

The 83(b) election

If you have founder vesting (you almost certainly will), you must file an 83(b) election with the IRS within 30 days of receiving your shares. Missing this can have severe tax consequences down the line.

This is one of the most commonly forgotten administrative steps. Set a reminder. Mail the form. Keep proof of mailing. We have a dedicated guide: the 83(b) election.

Side letters

A side letter is an agreement between the company and a specific investor that grants them rights other investors don't have. Common examples:

• Information rights beyond the standard IRA.
• Pro rata rights for an investor who isn't the lead.
• Most-favoured-nation (MFN) protections.
• Regulatory accommodations for corporate or strategic investors.

Side letters are normal and not something to fear, but they require attention. A side letter granting an investor MFN that promises them every future right you give anyone else can constrain your future negotiations. Read each one and have your lawyer flag implications. We dig into this in side letters explained.

The small things that delay closes

Common quiet causes of delay:

• Missing IP assignments. A contractor who wrote material code without a signed IP assignment can hold up a close.
• Cap table reconciliation issues. SAFEs that haven't been properly converted, options unaccounted for.
• Investor KYC. Larger funds can take days or weeks to complete KYC. Start this early.
• State filing delays. In the US, the Delaware filing for the new certificate can take days.
• Sign-off from prior investors. Existing preferred shareholders may need to consent to the new round. Their lawyers may not move at the new round's pace.
• Wire delays. Year-end, holidays, and large international transfers can take 2–5 business days. Plan for this.

For most of these, the cure is preparation: clean cap table, clean IP, early KYC, lawyers communicating directly, no surprises in the documents.

Multi-investor closes

If you're closing multiple investors at once (a syndicate), things get logistically harder. Each investor has their own lawyer, KYC process, and signature pace. A few practical moves:

• Have a clear "lead investor closing" with the lead and any anchor investors signing first.
• Allow follow-on investors to sign joinders to the documents post-lead, often within 60 days.
• Set a clear close date and stick to it. A floating close date encourages drift.

Closing in waves is normal: the lead and a few key investors close on day one, followed by smaller cheques over the next week or two. As long as you've hit your target (or close to it) on the first close, the rest is administrative.

Money in the bank

When the wire actually hits — sometimes hours after the close, sometimes the next morning — three things to do quickly:

1. Confirm the amount. Reconcile against the close documents.
2. Move the money to a sensible structure. Don't leave eight figures sitting in a single checking account. Sweep accounts, treasury bills, money-market funds — talk to your bank or a treasury service.
3. Update internal stakeholders. Co-founders, board, key employees. The closing is real, the money is real, the next chapter starts now.

Avoid a victory lap before the wire hits. Plenty of rounds slip in the final 48 hours. Founders who pop champagne at the term sheet, then have to take it back when a closing condition fails, regret the announcement order.

The first thing to do post-close

Take 24 hours and do nothing. Genuinely. Sleep, breathe, take your team to dinner. Then come back in on Monday and shift the company's posture from "raising" to "deploying". The capital is now a tool to be used, not a goal to be celebrated. The work that comes next is what determines whether the round was worth it.