Disclaimer: This post is for general informational purposes only and is not legal, financial, or investment advice. Crowdfunding involves regulatory requirements and risks, including possible loss of capital. Consult a qualified professional before making decisions.
How to Choose a Lead Investor
A lead investor is a critical part of the funding process. They serve as the representative of all other investors for the duration of the contract. In the event of a default, the lead investor is responsible for taking the necessary steps to recover funds—this includes contacting a collection agency, selling the contract to a collector, and overseeing the execution of the contract.
To ensure the process works smoothly and fairly, Token Interest sets several requirements for selecting a lead investor. These requirements are designed to ensure the lead investor acts in the best interest of all investors.
1. Must Be Independent of Your Family
The lead investor cannot be a member of your family. A family member is more likely to prioritize your interests as the business owner rather than those of the broader investor group. To maintain fairness and confidence among all participants, the lead investor must be motivated by protecting and maximizing returns for all investors.
2. Must Have Basic Computer Literacy
The lead investor needs to be comfortable with online tools. They will be responsible for certain operational tasks on the smart contract, which must be completed online. Token Interest will provide training videos to explain how to use these tools. The lead investor must confirm directly to Token Interest that they have reviewed and understood the training.
3. Must Be Willing to Accept the Role
Being a lead investor involves added responsibilities. The person you choose must confirm—via email or other written communication—that they understand and accept these duties. Make sure the candidate is not only willing but also has the time and availability to respond promptly if any issues arise. A dependable lead investor can make a significant difference in maintaining trust among all participants and in ensuring the contract is handled smoothly if challenges occur.
A qualified lead investor is essential. Without one, you cannot access the funds raised in your campaign. Selecting the right person—someone independent, capable, and committed—is a key step in running a successful raise.