Soft Commitment
Content
Definition
A Soft Commitment is an initial, non-binding expression of interest from an investor to fund a startup, subject to further evaluation, due diligence, and final agreement. It indicates potential financial support without firm obligations.
Usage and Context
A soft commitment shows an investor’s early interest in funding a startup but doesn’t come with any binding promise.
Frequently asked questions
- What is a soft commitment? A soft commitment is an informal promise to invest or participate, often used in early-stage negotiations without binding terms.
- What is a soft commitment in VC? A soft commitment in venture capital is an informal promise from an investor to participate in a funding round, not legally binding.
- What is the difference between hard commitment and soft commitment fundraising? Hard commitment is a definite agreement to invest, while soft commitment indicates interest but is not legally binding.
Benefits
A soft commitment shows an investor`s initial interest in funding a startup without binding obligations.
Conclusion
A soft commitment shows an investor`s initial interest in funding without a firm obligation.
