The work between a term sheet and a close
A signed term sheet is not the end of the process. Diligence requests, data room traffic, legal comments, and a closing checklist all still have to be run — and that stretch is where deals quietly slip.
Founders tend to treat a term sheet as the finish line. In practice it is the point at which the volume of work goes up.
What is actually open
After signature, the following are all still live:
- Investor information requests, arriving from several people in parallel
- The data room, which now gets read properly rather than skimmed
- Financial diligence
- Legal diligence
- Term-sheet comments turning into definitive documents
- A closing checklist with items owned by management, counsel, and the investor
None of these are hard individually. Together they are a coordination problem, and they arrive at exactly the moment a management team is most tempted to go back to running the company.
The failure mode is drift
Deals in this stretch rarely die from a single event. They slow down. An open item sits with the wrong owner for a week. A diligence question gets answered informally and never lands in the data room. Counsel is waiting on the company, the company thinks it is waiting on counsel.
Drift is expensive because it compounds: every week the process is open is another week in which something outside it can change.
What holds it together
One current list of open items, owners, and deadlines, visible to everyone, maintained through funding.
That is genuinely the whole mechanism. It is unglamorous and it is the difference between a close that lands on schedule and one that arrives two months late having burned the goodwill it started with.
The point of running this centrally is that management should be answering diligence questions, not tracking who owes what to whom.