(Also posted over on the BGV blog)

When people have said ‘yes’ to investing in your venture and you’ve agreed on the basic terms, you’d imagine things might get easier. Unfortunately it’s usually trickier than that. Seed rounds can rumble on for several months before you actually get the money in the bank and start building the business.

There are a few reasons for this, each of which you can do something about to help speed things along.

Not everything is in the term sheet — when you go from term sheet to the actual documents that will be used in your investment deal, you’ll tend to find that the wording of clauses gets a bit more complex and causes a few surprises. I think that’s proabably especially true for social ventures where there might be some wording around safeguarding the social aims. Using lawyers who are experienced with seed investment deals will help here. They’ll know how to go from standard term sheets to standard documents.

Due diligence — at seed stage the due diligence done by investors varies from fairly rudimentary to pretty officious and will often take the form of covenants where you promise that you’ve done or disclosed everything that’s in a list — some will get you to prove each thing. The way to keep this process short is to keep all your key documents organised and ready. Everything from your incorporation certificate to each contract or agreement you’ve signed. Keep them all in a folder in Dropbox.

You need a bit more money to close the round — even when you’ve got one investor committed it might not mean you have enough money committed to get to your next major milestone. If you do need to ‘fill up your round’ ask the people who have committed if they know others who might be interested. Keep your AngelList profile up to date and let the team there know you’re looking for help.

Co-ordination problems — the final reason it takes time to close a round is that there are usually quite a few people involved. Previous investors, founders, lawyers, accountants, as well as the new investors which could be multiple people if you’re working with angels. The only way around this is to be clear with everybody about the process and then overcommunicate so everybody knows what is required of them and when. Working with good lawyers will help here. There are some in London who will patiently explain the practical process as well as watching your back. If you find you get stuck, ask somebody who has been through it before. When you’re in the middle of what can seem like an interminable process, another perspective can help you see the best next step.

So there you go. Seed investment in the bank. Next week we’ll look at other forms of seed financing including what grants are available for tech-based social ventures in the UK.