Dry closing is signing and legally closing a financing before all investment cash has been deposited—paperwork first, wires shortly after.

How it works

In a typical venture round, investors sign the stock purchase agreement, investors’ rights agreement, and related documents. In a wet closing, funds wire simultaneously or before signing. In a dry closing, signatures happen first; wires follow within an agreed window—often a few business days.

Dry closings appear when coordinating many angels, rolling closings with different close dates, or when a lead investor’s capital call timing does not align with the company’s urgency. Counsel may authorize the company to issue stock upon signature, contingent on payment.

Example: a Series A closes on a Friday with three investors. Two wire immediately; the third’s fund needs Monday processing. Documents sign Friday (dry close); all cash lands Monday (becomes fully funded).

Why it matters

• Founders: You can board, announce, and hire against a signed round—but runway math should use cash in bank, not signed commitments. Confirm each wire cleared.
• Investors: Funds use dry closes to meet company timelines while internal capital call processes run. Failure to wire can trigger default provisions.
• Counsel: Documents should specify funding deadlines, consequences for failed wires, and whether stock is issued before payment.

Common mistake

Treating a dry close as fully funded for spending decisions. If a major investor fails to wire—a rare but real event—the company may be legally closed but cash-short. Verify bank balances before large commitments.

Related ideas

• Rolling close — multiple close dates in one round
• Capital Call — when fund LPs send money
• Stock purchase agreement — core closing document
• Escrow — sometimes holds funds until conditions clear