Module 4 — Running the Process · Lesson 4.4
Closing the Round and Filing the Form D
From signed term sheet to money in the bank — and the notices that follow
What you'll learn
- Plan the close as a project with owners, documents and dates
- Convert verbal commitments into signed documents and received funds
- File a Form D on time and know when an amendment is required
- Recognise state notice-filing obligations for a Rule 506 offering
A term sheet is mostly non-binding. Until the definitive documents are signed and the money has arrived, every investor can still walk, and some will — because a partner meeting went differently, because diligence found something, or simply because time passed. The close is therefore its own phase of the raise, with its own pipeline: documents drafted, documents signed, funds received, filings made. Run it like the rest of the raise, with dates and owners, and it is usually uneventful.
Commitments are not money
Paul Graham's 2013 essay on raising money is blunt about the last mile: a verbal yes is not money. Get the commitment confirmed in writing, then follow up until the wire arrives — it is not a deal till the money's in the bank. He adds a pricing rule that matters at this stage: the valuation your first investor agreed to becomes your asking price, and if you later lower it, give the same terms to the investors who committed earlier.
For a priced round, the definitive documents are the set Lesson 2.1 described — the restated Certificate of Incorporation, the Stock Purchase Agreement, the Investors' Rights, Voting and Right of First Refusal and Co-Sale agreements — drafted and negotiated by counsel on both sides, often starting from the NVCA models. For SAFEs, the close is investor by investor: each signs and wires when ready.
Treat each investor's path to close as a checklist: documents sent, comments resolved, signature received, accreditation confirmed (Lesson 1.4), wire instructions verified by phone, funds received. An investor stuck on any line is a risk to the round.
The Form D
Every issuer relying on Rule 504 or Rule 506 must file a notice of sales on Form D with the SEC no later than 15 calendar days after the first sale of securities in the offering; if the fifteenth day falls on a weekend or holiday, the due date is the next business day. When the first sale occurs is a legal question that can arrive earlier than founders expect, so have counsel fix the date for your round.
The SEC's own guide for small businesses, updated in February 2026, sets out the mechanics. Form D is filed electronically on EDGAR. The company needs an EDGAR account and a Central Index Key number first, obtained by submitting a Form ID application through EDGAR Filer Management; individuals now sign in with Login.gov credentials. The SEC charges no fee to open an EDGAR account or to file a Form D or an amendment. Allow time: the guide advises submitting Form ID as soon as the company decides to raise under Regulation D, because the application must be processed before the filing can be made. Once filed, the Form D is public.
Amendments are required, as soon as practicable, to correct a material mistake of fact or to reflect certain changes in the information filed; the rule lists changes that do not require one, such as a decrease in the total offering amount or an increase of 10 percent or less. The SEC's guide summarises the annual rule: an amendment is required each year while the offering continues for more than twelve months.
State notice filings
A Rule 506 offering is a covered security under Section 18 of the Securities Act, which means states cannot require it to be registered. But the statute preserves the states' power to require notice filings substantially similar to those in effect in 1996, and to collect fees. In practice, that means the states where your investors are located may each require a notice filing and a fee, on their own deadlines.
The practical rule for a founder is to tell counsel, before closing, the state of residence of every investor, and to calendar each state's filing. For a placement agent, state notice filings for an issuer's offering are part of the closing checklist the desk runs, alongside FINRA's own filing requirement for members' private placements, covered in Lesson 5.3.
After the close
A closed round leaves records that will matter at the next one. Keep the fully executed documents, the cap table updated for the round, each investor's accreditation evidence, the Form D and state filing receipts, and the wire confirmations together in one place. The next lead investor's diligence will ask for every one of them, and so will an acquirer.
Then tell people. Thank every investor, including those who passed — some will be in the next round. Update the pipeline: committed investors become shareholders to report to, and passed investors become relationships to maintain. The final module begins there.
Run the close as its own checklist
- 1
Make closing a stage with a checklist per investor
On the round in /deals, move committed investors to a closing stage and use each investor's next step for the line they are stuck on — documents, signature, accreditation, wire. Mark the stage won in Manage stages so closed rounds count as closed.
- 2
Send signatures through a tracked envelope
With XDocs connected, the agent can send a prepared document for signature (xdocs_send_envelope). It dispatches immediately — there is no draft step — so it confirms the document and every signer with you first; reminders and envelope status are one request away.
- 3
Put the filing deadlines on the calendar
The day the first investor commits, add the Form D deadline (15 calendar days) and each state notice deadline counsel gives you to /calendar, and start the EDGAR Form ID application if the company has none.
Closing discipline
- Days from term sheet to close
- Elapsed days from signed term sheet to final funds received.
- Healthy signal: A Kavanah suggestion: plan for weeks, not months, and treat any investor stalled for a week as a risk to escalate.
- Commitments converted to funds
- Share of verbal or written commitments that end in money received.
- Healthy signal: Track it honestly. Every gap is a lesson about when you counted a commitment too early.
- Filings on time
- Form D and state notice filings made by their deadlines.
- Healthy signal: All of them, every round.
Key takeaways
- ·A term sheet is not a close; manage each investor through documents, signature, accreditation and wire.
- ·File Form D on EDGAR within 15 calendar days of the first sale; there is no SEC fee, and the filing is public.
- ·Amend when information materially changes and annually while an offering runs past twelve months.
- ·Rule 506 offerings preempt state registration, but most states still require notice filings and fees.
The money is in. Module 5 is about what comes next: the board and investors you now report to, and the professional side of fundraising — fund managers raising from limited partners, placement desks raising for issuers, and agent-assisted operations that must be governed.
Sources
- 1.17 CFR 230.503 — Filing of notice of sales
U.S. Securities and Exchange Commission (eCFR) · Electronic Code of Federal Regulations, up to date as of October 21, 2026 · 2026
Form D due no later than 15 calendar days after the first sale (next business day if it falls on a weekend or holiday); when amendments are required and the listed changes that do not require one.
- 2.What is a Form D? When do I file a Form D? How do I file a Form D?
SEC Office of the Advocate for Small Business Capital Formation · SEC staff resource (February 2026) · 2026
Form D filed on EDGAR; EDGAR account and CIK via Form ID; Login.gov credentials; no fees; annual amendment while an offering continues beyond 12 months; the filing becomes public.
- 3.15 U.S.C. 77r — Exemption from State regulation of securities offerings
Legal Information Institute, Cornell Law School · United States Code (as published by LII) · 2026
Covered-security status for offerings exempt under Commission rules issued under Section 4(a)(2), and states' preserved power to require substantially similar notice filings and fees.
- 4.How to Raise Money
Paul Graham · paulgraham.com (September 2013) · 2013
Get commitments in writing and follow up until the money arrives; the first investor's valuation becomes your asking price, and a later reduction should be extended to earlier investors.