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Rolling Closing Date
In seed rounds it is common to have a rolling closing date. This means that investors will join the round and provide funding before all investors necessary to meet the target amount have committed. The startup cannot wait to close the seek round until all investors commit, so it will arrange for multiple closings. All rounds will generally close within 90 days of the 1st round. Investors generally dislike rolling closing, because it increases the risk to early investors. The early investor is committed whether the firm achieve the entire target amount. This can create operational difficulties if the startup does not receive all funding. Likewise, later investors receive an advantage in waiting to see if the seed round will be fully funded and how the firm performs over the extended period. In any event, all investors in the round receive shares under the same terms.
In Series A rounds, there is generally a single venture capital firm involved. As such, the funding round is generally closed and all of the funding takes place at one time. There are, however, situations where series A financing rounds have rolling closings. A series A closing is generally done pursuant to vote of the board of directors. The early investors may require a majority (sometimes super majority) of directors or shareholders approve the timing of future closing and the investors involved.