What does it mean to lead a round?

The lead investor sets a round's terms — negotiating the valuation and term sheet, writing the largest check (commonly 40–60% of the round), doing primary diligence, and usually taking the board seat if there is one. Other investors 'follow' on the lead's terms.

Finding a lead is the hard part of most raises; followers commit conditionally, so a round often goes from cold to oversubscribed the day a credible lead signs. Whether a firm leads or follows is one of the most practical facts to know before pitching it.