The questions come two years later, from a lawyer who was not there.
A round file has to answer four questions from documents rather than memory: what each investor agreed to, that their money actually arrived, that the sale was made under a valid exemption, and what is still outstanding on what terms. The expensive gaps are almost always the second and the fourth, because both depend on facts recorded at the time.
The round runs over a few weeks across email, a signature tool, a bank portal, and a spreadsheet. Everything is obvious while it is happening. Two years later, the questions arrive from someone who was not there, in writing, with a closing date attached, and the obvious parts are the ones nobody wrote down.
The fix is not a better filing habit at the end. It is deciding, at the start, that each fact gets recorded where it happens.
| The question | What answers it |
|---|---|
| What did each investor agree to? | The executed instrument, countersigned, plus every side letter and amendment, matched to the investor |
| Did the money actually arrive? | Your own bank’s evidence of receipt, matched to the instrument, with the date and amount |
| Was the sale lawful? | The exemption relied on, the accredited investor determinations, the Form D filing, and state notice filings |
| What is still outstanding? | A current list of every unconverted instrument with its own terms, and the issuance record for each one that has converted |
The most common gap in a round file is not a missing document. It is a claim recorded as a fact: an investor said the wire went out, someone ticked a box, and no one ever matched it against the account.
The number you tell the next investor should be built from money that arrived, not from signatures collected. Those are different numbers during almost every round, and only one of them is a fact.
The last one is the cheapest insurance in the list. An investor who holds their own executed copy and their own record of what they sent is an investor who never has to ask you to reconstruct it.
Diligence requests differ in wording and rarely in substance. Expect these, and expect them with a closing date already set.
Matching money to instruments. Everything else is retrieval from a folder. This one is reconstruction from bank statements, and it is the reason to record receipts against instruments while the round is running rather than after.
This is an explanation of how a transaction works, not legal or tax advice. Termn is not a law firm, a bank, an escrow agent, or a money transmitter, and it never holds your money. What is right for your situation is a question for your own counsel, who decides it and drafts the documents that carry it.
Termn keeps the round file as it is created: one secure link per investor, wires reconciled against your bank’s own evidence, and every SAFE tracked as outstanding until stock is issued.
How Termn runs SAFE financing Your first workspace is free, and nothing goes out until you send it.
Funded is not converted. The gap between them is usually measured in years.
The file is finished when a stranger can read it without asking anyone anything.
Three separate facts that most systems collapse into one green tick.
Signature to stock: what to decide, what to send, and what to keep. Free PDF, emailed to you.
Everything else is in the learning center.
Your first workspace is free: one live workspace, unlimited agreements inside it, no card.
Close your first deal freeRather talk it through first? Contact us at sales@termn.ai.