Wire — short for wire transfer — is how investment dollars move from investor accounts to the company at closing, turning signed documents into spendable cash.

How it works

Closing sequence:

1. Sign stock purchase agreements and ancillary docs
2. Company delivers closing certificates (good standing, secretary certificate, etc.)
3. Investors initiate wires per side letter instructions — often same-day via Fedwire or SWIFT internationally
4. Company confirms receipt; board approves share issuance

Founders provide wire instructions from the company’s bank — verify routing numbers verbally to prevent fraud. Partial closings happen in tranched rounds; each tranche wires on milestone satisfaction.

For fund LPs, capital calls culminate in wires to the fund, then fund wires to portfolio companies — two-hop liquidity.

Delays stem from missing signatures, OFAC checks, bank cutoffs, or holidays. Verbal commits are not wires — only the transfer counts for runway math.

Why it matters

• Founders: Announce hires and vendor prep after cleared funds, not at term sheet. Maintain a few weeks buffer for wire delays.
• Investors: Operations teams track wire dates for ownership registers and LP reporting; mistakes in amount or entity name require recall and re-send.

Common mistake

Spending against a term sheet before wires clear — if a investor fails final compliance, you may face a cash gap with obligations already made.

Related ideas

See also verbal commit, capital call, and closing checklist.