Pick up check directly from an angel investor

OK, you finally have firm commitments from your angel investors and the round of $500,000 is completely committed. You even have people who would still like to invest if you expanded the offering or if someone drops out.

Now the problem is getting the documents signed and the checks collected or the money wired in.

Here is where it can get sticky. Even though you have indicated that the closing is scheduled for a certain date — usually a Monday or a Friday — the money and required documents rarely arrive precisely on that date.

Inevitably the nervous entrepreneur starts thinking: Why aren't these guys more conscientious? They have committed the money and know the closing date — why don't they perform as agreed?

The problem arises from the adage that "He who has the gold makes the rules" — or even better, "He who has the gold can take his own sweet time on financial matters."

You need to remember that the investor's money is coming from someplace where it has been bringing some sort of financial gain: money market funds, mutual funds, brokerage accounts, etc.

No matter how willing they may be to invest in your company, they aren't going to be anxious to take it out of an account that is making money for them. Certainly, none of your investors wants to be the first one to do so. More often than not, they'll wait until the last possible minute to pull the money out.

That's understandable, don't you think? It's also understandable that it generally takes a little while for the money to make it to your bank account even after it has been withdrawn by the investor. It generally has to be transferred from an investment account into a checking account so a check can be written to your company. Most investors like hard proof of their investment; hence, a check.

Eventually the funds come in and the deal closes, but it can take up to two weeks beyond the closing date to get all of the money in the bank. It's frustrating for the entrepreneur and takes a lot of time trying to collect the funds with repeated calls and e-mails — time that could be much better spent executing the business plan with the new funding.

So, what is the solution to avoid this hassle? It's really quite simple. Once a closing date has been established, the investors should be given only one choice: having the check picked up. If they are out of state, funds can be wired to the company. Make sure that the wiring instructions are included with the closing documents for those who cannot be seen personally.