How rolling closes are powering deeptech fundraising
Fundraising, as many startup playbooks describe it, should follow a clean arc. Raise a set amount of capital in a defined window, sign the term sheet, and close the round in one swift motion. But for many founders, particularly with fledgling deeptech companies, that version of events is more fiction than fact.
Instead, we are seeing rolling closes becoming more common in today’s fundraising environment. This is when a company raises a round of funding but doesn’t have all the investors commit and wire money simultaneously. The startup closes portions of the round in multiple tranches over a period of time, each time ‘closing’ on the commitments from whichever investors are ready, while leaving the round open for additional investors to join later.
UNDERSTANDING THE ROLLING CLOSE
Rolling closes typically occur when startups need flexibility, whether that’s around timing, attracting a key investor, or access to capital. Often misunderstood or seen as a fallback strategy, rolling closes deserve to be re-evaluated as a proactive fundraising mechanism, especially for companies in capital-intensive, high-risk sectors like deeptech.
A company will initiate a rolling close with a first tranche that secures a meaningful runway to reach a critical milestone. A well-structured first close should stand on its own, enabling tangible progress even if no further capital materialises. The open window – often three months – allows additional investors to come in on the same terms, without the need to re-open negotiations or obtain further board consents.
The beauty of this structure is its simplicity. Once the core terms are set, follow-on investors can join via straightforward subscription agreements and deeds of adherence. This agility lets founders keep moving, rather than pausing momentum to accommodate lagging conversations.
For deeptech startups, where R&D is inherently unpredictable, this flexibility is invaluable. It means founders can begin hiring, building, or testing with confidence, rather than holding their breath for a perfect close that may never come.
THE ROLE OF OVERFUNDING
One of the more misunderstood aspects of rolling closes is the role of overfunding. Founders are often coached to raise only what they need. While this advice makes sense in certain contexts, it doesn’t always hold up in deeptech.
For example, in the case of one of my portfolio companies, they chose to exceed their target raise during the rolling close period. The decision was not made lightly, but it was driven by the opportunity to bring in additional high-quality investors who could strengthen the cap table for future rounds, and by a desire to fortify its operations.
In sectors where scientific results don’t always arrive on the first try, having contingency built into the plan is a compelling strength. Overfunding enabled this particular company to add an R&D buffer that could protect against timing slips and accelerate critical milestones, like key hires and early customer pilots. The result was a stronger business, better positioned for growth, and more attractive to future investors.
DEALING WITH LATE ARRIVALS
Another frequent scenario in rolling closes is the late arrival of a strategically important investor. Sometimes, these players are slower to commit because they want to see progress, proof points, or simply need more time for internal processes. When they show up late in the round, founders often ask, “How should I accommodate them? Do I change the terms? Or perhaps extend the close?”
In many cases, the most effective approach is to extend the rolling close and admit them on the same terms. If the company’s risk profile hasn’t changed materially since the initial close, this is usually fair and acceptable to all parties. But if significant progress has been made, perhaps a product was launched or a commercial agreement signed, founders need to reassess. The question then becomes, “at what price would we happily accept this investor today?”
This framing is useful. It centres the conversation on value, rather than just process. It also provides a clear narrative to bring to your board: why this investor matters, what they offer beyond capital, and whether any adjustment in terms is warranted.
In truth, raising capital is as much about stakeholder management as it is about money. Founders must be able to clearly articulate to directors and existing shareholders what the extra funding enables. At the same time, the dilution impact must be modelled and understood. Overfunding is only valuable when the additional dilution today is outweighed by the long-term value it enables, which means transparency and clarity in these discussions are a must.
ROLLING CLOSES DEMAND TEMPO
Embarking on a rolling close requires dynamism. If an investor is ready to move, prioritise getting the papers ready. To convince an investor to move, use positioning tools like defined deadlines to maintain momentum.
What we’ve learned through our own experience at Empirical Ventures is that rolling closes, when approached strategically, can be really effective for early-stage and capital-intensive startups. They allow founders to synchronise capital with actual company progress, opening the door to better investors, better timing, and better decisions.
So, to deeptech founders planning their next raise, don’t wait for the perfect round. Build a smart structure, start strong, and keep the door open for quality investors who align with your mission. A rolling close might just give you the room to raise on your own terms.
This article originally appeared in the September/October 2025 issue of Startups Magazine. Click here to subscribe
