What is a lead investor?
A lead investor is the investor who takes the largest stake in a financing round and negotiates the principal terms on behalf of the round. The lead conducts the bulk of due diligence, sets the price and term sheet, signs the documents first, and often takes a board seat.
Other investors in the round — followers — generally accept terms the lead has negotiated. Strong leads bring credibility, follow-on capital and active value-add; weak leads can compromise round quality and complicate future fundraising.