Verivend Feature - 9/17

Brian Nichols
September 17, 2025

👋 Hi! This is Small Bets, a newsletter that unpacks the world of early-stage investing.

Today's topic: The nuts and bolts of your first close

Investing into startups can be so much fun.

But there’s also a boatload of administrative work that goes into being a VC. And that… is less fun.

Thankfully, we know the folks over at Verivend. And they let us pick their brains on everything that goes into managing the closing process with your LPs.

Today, we’re gonna talk about what this entails, the tools you need to pull it off, and how to manage the whole process without going absolutely crazy.

By the way: Verivend is a platform that’s like Venmo for private investors. They’ve processed over $2.5B in investment transactions, and serve over 300 customers who have facilitated over 1,000 deals on the platform.

They’re also wicked smart – full-on experts when it comes to the operations of running a fund or SPV.

Ok, on to the article.

Real quick, let’s define “close”

A close is basically THE deadline for your investors.

It's the moment when your LPs officially sign your fund documents, commit their money, and you get the green light to start investing.

For an SPV, you'll usually just do one close, or two closes in quick succession. It all happens pretty quickly.

But funds are a different story.

For a fund, you might (ahem, should) do multiple closes over several months. Like this:

First close: Your initial group of investors commits enough money to officially launch your fund. Once this happens, you can start investing in startups and collecting management fees.

Subsequent closes: More investors join over the next few months under the same terms.

Final close: The fundraising period is officially over.

Why this matters: The first close is huge because it's when your fund legally comes to life.

Before a close, you're just someone with a pitch deck and an investment thesis. After, you're officially in business.

Setting your timeline

The first rule of doing multiple closes: don’t wing your timeline.

Give it some serious thought, then stick to the timeline and number of closes you specify in your LPA.

You have a LOT of wiggle room within the boundaries of your docs. But seriously… LPs can tell if you’re making things up as you go, and it’s not a good look.

The whole fundraising process for funds is typically 12-18 months. The clock starts ticking once you do your first close.

For SPVs, it can be a few weeks to a few months (although Verivend’s record is 48 hours to raise and deploy an SPV to a target company 🤯).

There are a few ways you could go about setting your first-close deadline:

You could tie it to a specific amount of capital raised. 25-50% of your fundraising goal is typical.
You could tie it to a certain number of committed LPs. 5 to 10 is typical.
You could fix a date, like 60 days after you send your first LPA (Limited Partner Agreement).

However, when you land on your close deadline, stick to it. If pushing out that deadline becomes a habit, you’ll lose your credibility.

Before you even think about closing…

You’ve gotta sort your paperwork. I know, I know – paperwork is boring.

But when an investor says, “I’m interested, send me more information,” you’re gonna want to have everything ready.

Here’s what you’ll need:

LPA (Limited Partnership Agreement):
The core legal agreement between you (the GP) and your LPs. It outlines the fund’s terms, fees, structure, and governance. It should also include your fundraising timeline and at least a rough outline if number of closes.
PPM (Private Placement Memorandum):
A detailed, lawyer-drafted disclosure document that says: “Here’s what we’re doing. Here’s how it works. And here are all the ways this could go wrong.” You’ll need this if you’re raising from institutional LPs or under Rule 506(b) with non-accredited investors.
Subscription Agreement:
The document LPs sign to formally commit. Make sure it’s clean and pre-populated with key info like wire instructions, AML/KYC prompts, and investor-friendly formatting.

Quick plug: (they asked me to say this). Wire instructions? Lol just use Verivend.

Side Letter Template:
A standardized doc to handle common carve-outs — like fee breaks, MFN clauses, or confidentiality requests. Keep a boilerplate version handy so you’re not starting from scratch every time.

Pro tip: Set up a data room where investors can securely view all these documents. You can use something simple like Notion, or use a proper data room solution like Verivend, which keeps everything for you and your LPs in one place.

Just don't email PDFs back and forth like it's 2005.

Oh, and if managing and getting all those documents signed sounds super complicated, don’t worry. Verivend can handle all of it for you.

The process of actually, finally closing

Here's what happens once an investor verbally commits:

Step 1: Data Room Access

They get invited to your data room where they can look at all your documents.

BTW, Verivend also handles this.

Step 2: KYC (Know Your Customer)

This step is designed to prevent you from taking money from anyone unsafe.

You need to verify that the person isn’t on any government watch lists and that they're actually allowed to invest (accredited investors only, probably).

This sounds scary, but it's mostly just running their info against databases.

BTW, Verivend also handles this.

Step 3: Commitment

The LP tells you how much they want to invest, and they sign your subscription agreement.

Hooray! Break out the champs.

Errrr… make that affordable champs because the LP won’t be wiring any money yet.

BTW, Verivend also handles this plus Capital Call notices and payments.

Step 4: Capital Call

This is when you actually ask for the money – usually when you're ready to deploy it into a startup or pay yourself management fees.

We wrote about capital calls here recently if you wanna brush up.

The biggest nightmare is the bank account

Here's something nobody warns you about: setting up bank accounts is a massive pain. You need a separate account for each investment entity (each SPV, each fund).

And banks move s l o w.

For SPVs especially, banking delays can kill deals. I've literally seen people yelling at banks because a three-day account setup killed their chance to get into a hot round.

Don't be that person.

Instead, set up your accounts early or use a platform like Verivend. Their payments platform – including instant bank account setup – is a game-changer.

The Wire Transfer Problem

Ah, wire transfers. Everyone’s least favorite thing.

Somehow this financial technology from the cowboy era is still how most private market transactions happen.

Seriously…the first wire transfer was sent in 1872, and they’re called “wires” because they used Western Union’s telegraph wires to send them.

There is literally nothing good about wires.

LPs spend loads of time combing through their inbox looking for that one thread with the PDF that contains the wire instructions.

And then when they find it… it’s for the wrong account. So the money has to be returned and then re-sent.

Meanwhile, GPs are emailing the LP: “Did you send it?” and “let me call my bank” and “that’s the wrong account”.

This is one of the stickiest parts of a close.

And it’s a big reason that platforms like Verivend are so beloved. Verivend makes the payment part of doing a close feel more like Venmo, less like 1872.

Read the rest of this guide

Putting together this “capital call close” guide with Verivend was such a blast.

But this email is getting a tad long, so here’s what we’re gonna do.

If you want to read the rest of this guide, head over to the blog.

We cover things like:

Best practices around communicating with LPs
Common first-timer mistakes
The “first close checklist” (this part is my favorite)
When to use a spreadsheet and when to shell out for a platform

It’s pretty awesome content, if I do say so myself.

– Brian from Angel Squad

PS: If you’re prepping for a close and you don’t want to handle everything yourself, highly recommend checking out Verivend. Their platform handles everything… from data room documents to automated comms to anything related to payments.

And yes, this is sponsored. But also Verivend is awesome.

📕 Keep Reading

Is this ethical? It is possible? Is it worthwhile?

Imagine that you’re an early stage investor with equity in a startup company. For whatever reason, you’d like to sell your shares.

Maybe you no longer have faith in the company, or maybe you need to liquidate some assets. What's the protocol here?