---
title: "What Is Verbal Commit?"
term: "Verbal Commit"
description: "A verbal commit is an investor's informal promise to invest a stated amount in an upcoming round — not legally binding until term sheet and closing documents are signed."
date: 2026-07-25T00:00:00.000Z
updated: 2026-07-25T00:00:00.000Z
topics: ["venture-capital"]
source: https://venturecapitaltracker.com/glossary/verbal-commit
---

# What Is Verbal Commit?

> A verbal commit is an investor's informal promise to invest a stated amount in an upcoming round — not legally binding until term sheet and closing documents are signed.

**A verbal commit** is an investor's non-binding indication they intend to participate in your round at a proposed size — useful for momentum, risky if treated as cash in bank.

### How it works

Fundraising often progresses in layers:

1. First meetings and partner presentations
2. **Verbal commits** — "We're in for $2M pending diligence"
3. Term sheet signed with a lead
4. Legal docs and [wire](/glossary/wire) transfer

Verbal commits help founders signal heat to other investors. Leads may ask who else is in before anchoring. Commits can be soft (partner interest) or firm (IC-approved, counsel engaged) — the label rarely distinguishes, so founders should ask directly.

Investors revoke verbal commits when diligence surfaces issues, internal priorities shift, or the lead terms change economics. No penalty unless a signed letter exists — rare at venture stage.

Best practice: track commits in a spreadsheet with status (verbal, term sheet, wired), contact owner, and conditions. Update the board honestly; overstating commits destroys credibility when leads call references.

### Why it matters

- **Founders:** Plan runway assuming verbal commits may not close. Do not pause other investor conversations until at least a signed term sheet with a credible lead.
- **Investors:** Verbal commits let firms hold allocation while completing diligence — but reputational damage follows if firms flip without cause after public signaling.

### Common mistake

Announcing a round as "fully committed" based on verbals alone. Until wires land, capital is not secured — downstream hires and vendor contracts should reflect that.

### Related ideas

See also [wire](/glossary/wire), term sheet, and [written consent](/glossary/written-consent).

## FAQ

### What is a verbal commit in simple terms?

It is when an investor says they plan to put in a certain amount — often after a partner meeting — but has not signed a term sheet or wired funds. It is a handshake intent, not a closed deal.

### Why does a verbal commit matter?

For founders, stacking commits helps build momentum for a lead investor. For investors, verbal commits preserve optionality until diligence finishes — markets and portfolios change.


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Source: https://venturecapitaltracker.com/glossary/verbal-commit