Although entrepreneurs and venture investors typically drive the negotiation of the term sheet for a venture financing, once the term sheet is executed, the commercial parties (especially those who have not been through the process many times) often feel sidelined in the ensuing process to close and uncomfortable with their lack of visibility into and control over the timeline. Accordingly, I thought it would be helpful to provide a high-level overview of a standard venture financing timeline.


  • After the signing of the term sheet (“T/S”) by both parties, investor counsel will send out request to company to review its due diligence materials.
  • T/S signing +1 week, company will compile and provide the requested diligence material for investor counsel to review.
  • T/S signing +1-2 weeks, company counsel will draft and provide main and ancillary financing documents for investor counsel to review.
  • T/S signing + 3-4 weeks, investor counsel will provide comments and questions regarding both the diligence materials and financing documents. The parties will then seek to resolve these issues by week 4 so that they can proceed with signing and closing the deal.

Work Streams:

The three main work streams involved are diligence, main financing documents, and ancillary financing documents. These work streams will often include the following materials:

  1. Diligence materials (company to provide materials and investor counsel to then review)
    1. Corporate formation and organizational documents, including the certificate of incorporation, bylaws, resolutions of the company, and prior financing documents
    2. Company capitalization documents, including company stock ledgers, outstanding option paperwork, and pro forma capitalization.
    3. Current and past employment and founder agreements
    4. Agreements documenting ownership or license of intellectual property
    5. Material agreements, including agreements with incubators/accelerators, debt facilities, key customer agreements and real estate leases
    6. Any threatened, pending or settled litigation
    7. Other miscellaneous documents
  2. Main financing documents (company counsel to draft and investor counsel to then review)
    1. Amended and Restated Certificate of Incorporation
    2. Stock Purchase Agreement
    3. Investors’ Rights Agreement
    4. Right of First Refusal & Co-Sale Agreement
    5. Voting Agreement
  3. Ancillary financing documents (company counsel to draft and investor counsel to then review)
    1. Disclosure Schedule or Schedule of Exceptions to the Stock Purchase Agreement
    2. Board Consent
    3. Stockholder Consent
    4. Compliance Certificate
    5. Secretary’s Certificate
    6. Indemnification Agreement
    7. Management Rights Letter

Keep in mind that roughly 30 days from signed term sheet to close is typically a best case scenario, assuming no diligence issues or other sticking points in the negotiation. The addition of multiple investors can also complicate the process and extend the timeline. Despite that potential variability based on individual circumstances, I hope the above can be used as a general benchmark for companies and investors to keep their deal on track.